Front-End Load

A Front-End Load is an entry fee investors pay when they buy mutual fund units. It is usually expressed as a percentage of the investment amount and is deducted upfront.

For example, if you invest ₹10,000 and the front-end load is 2%, ₹200 is charged as a fee, and only ₹9,800 is invested.

Note: In India, most mutual funds no longer charge entry loads as per regulations by the Securities and Exchange Board of India.

Key Features

• Charged at the time of investment
• Reduces initial investment amount
• Usually expressed in percentage

Front-End Load vs Back-End Load

• Front-End Load: Charged when buying
• Back-End Load (Exit Load): Charged when redeeming

Why It Matters

• Impacts initial returns
• Important to compare fund costs
• Affects long-term investment value

"<p>If an investor puts ₹50,000 into a fund with a 1% front-end load:<br /> 👉 Fee = ₹500<br /> 👉 Actual investment = ₹49,500</p>"