Fund houses revise exit loads

At least 10 funds have hiked the exit loads. Debt funds are more prone to a revision in exit loads compared to their equity counterparts due to the extent of churning, according to experts.  While revising the exit loads, fund houses typically increase the holding time for the investors. Investors sometimes stay for as little as 10-12 days in a debt fund.  This impacts the liquidity and performance of a fund, according to the fund managers. An exit load serves as a deterrent to short-term withdrawals and restrains customers from frequently churning their portfolios.  It also ensures direct commission payment to the distributor. For example, Kotak Flexi Debt will charge an exit load of 0.10 per cent on redemptions that take place within 7 days. It did not charge anything till now.  Dhruva Chatterji, research analyst at Lipper, a fund tracking company, said,