Of late, a lot of fund houses have been raising the entry loads on their schemes. What this means to the investor is that a slightly higher component of his investment monies will go towards meeting the fund's expenses -- in other words his disposable investible assets will decline.

Amid service tax issues and refusal of the distributor community to share the same, fund houses are now passing on the burden of service tax to the investor by hiking the entry loads.

Visit our newly designed factsheets to get the latest update on loads.

To give investors a perspective on how mutual fund loads in India compare vis-à-vis loads in developed markets like the United States, we have taken some leading diversified mutual funds in that market.

As is evident from the table, loads in the US are more than twice those in India. This is largely because some fund houses in the US believe that mutual funds are sold and not bought.

There are higher marketing/sales expenses and fund distributors get higher payouts. Is this a shape of things to happen in India? Time will tell. Hopefully, funds in India will first put in some performance before they begin to charge loads of such a nature.

So what must investors do in the face of higher loads? One way is of course to take it on the chin, because you hardly have a choice.

You can't stop investing in a good equity fund because you have an issue with the loads! At some stage investors have to 'pay' for performance.

One way to take care of the higher load is to 'evade' it. A lot of fund houses waive off the loads for investors who opt for the systematic investment plans (SIPs). Lets see how a load waiver can help you spruce up returns.

On a monthly investment of Rs 25,000 over 12 months compounded over 3 years, the difference between the two options amounts to Rs 8,718.40. The difference is actually 2.25 per cent, which is the load you pay in the second option.

However, in absolute terms Rs 8,718.40 is a significant number and if the SIP amount is raised to say Rs 50,000, the difference doubles to Rs 17,436.80.

Loads have a significant bearing on your investments. And if you can avoid it, you should. Remember, the idea is to get as much as money as possible working for you. So don't burden yourself with the load, get it off your chest.

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