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Level Load

Updated on March 15, 2023

The level load is a charge imposed by mutual funds which is collected by the intermediaries towards the distribution and marketing costs, but is borne by the investors. It is a charge for investing in mutual funds and results in reduction of gains for the investors from their mutual fund investment. Level load is calculated as a percentage of the mutual fund holding and covers the charges towards marketing, distribution and customer service. The level load share is calculated based on the mutual fund’s average net assets. Thus as the net asset value of the fund increases by way of capital appreciation, the value of load charge will also increase, although in percentage terms it might remain the same. It will impact the fund returns negatively.

What are the factors to keep in mind regarding level load?

Some aspects to keep in mind wrt Level Load in Mutual funds are:
1. Load or fee is the cost of running the mutual fund and includes advisory expenses, marketing and advertising cost.
2. Investors should check the amount of level load along with other charges in the scheme’s information document, before making the investment decision.
3. It is generally in the range of 0.25%-1% and if a fund’s level load is below 0.25%, it is considered small and the fund is referred to as a No-Load fund.