Categories: BlogDirect Mutual Fund InvestmentsFinancial PlanningSavvyTax Saving With Mutual Funds

The Billion Dollar Secret Of Indian Mutual Funds Is Backdoor Fees

In Mutual Funds, More and more people are investing their hard-earned money. This is about 7.5 lakh crores of funds from people like you and me. Of this, the equity Mutual Funds are along about 4.5 lakh crores. Here we are giving an open secret for mutual fund back door fees.
Over the years these commission costs could represent anywhere between 20% to 60% of your final investment corpus. Think of it, half of our retirement money has already been given out to brokers, before you even begin to enjoy it? How bad is that?
Sadly customers are cheated by almost all who have access to them. This includes banks which control the first access point to customers. Then come various distributors and intermediaries (‘Brokers’). The worst thing is that most of them simply hide these fees; hardly anyone talks about them.

Conclusion :

The charges that are levied when the units are being purchased. The mutual fund would sell the unit price higher than the NAV. The mutual fund would buy back the units at a rate lower than the NAV. There are no fixed exit loads which are charged. It varies based on the scheme. The current practice is the funds could charge anyway from 0.50% to 3.00% depending on the holding period.

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Ram Kalyan Medury

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