Groww Mutual Fund has declared a modification in the exit load structure for its Groww Banking & Financial Services Fund, set to be effective from April 1, 2024. The alteration entails a transition from the current "Nil" exit load policy to "1% for redemption within 30 days."
This means that investors who opt to withdraw their funds early will now have to bear this additional cost.
Launched earlier this year, the Groww Banking & Financial Services Fund - Direct Plan have Asset Under Management (AUM) of ₹32 crore as of February 29, 2024, according to Value Research.
As of March 27, 2024, the Net Asset Value (NAV) of the fund stands at ₹9.9406.
The fund has delivered a return of -0.59% since inception.
This decision by Groww Mutual Fund comes in the wake of similar adjustments made by other mutual fund houses.
This adjustment follows recent stress test findings and industry trends, prompting the fund to transition from the previous exit load policy of "1% for redemption within 30 days" to a revised structure of "1% for redemption within 1 year."
Mutual fund houses retain the option to modify exit load structures as per industry dynamics and regulatory guidelines.
While reasons for Groww Mutual Fund's decision were not stated, such alterations commonly align with optimising fund liquidity, managing investor behavior, and aligning with prevailing market conditions and regulatory requirements.
Additionally, the move may aim to deter short-term trading activities and encourage a more long-term investment horizon among investors.
(Edited by : Amrita)
First Published: Mar 27, 2024 9:42 AM IST