Multiple choice

The Load charged to an investor in a mutual fund goes to meet the

  1. selling and distribution expenses

  2. expenses of AMFI

  3. printing stationery and posting expenses

  4. marketing and sales promotion expenses
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Load in mutual funds is a charge levied to cover the costs of distributing and selling the fund scheme. It pays commissions to distributors, brokers, and intermediaries who sell the fund to investors. This is why entry loads (now mostly abolished) and exit loads exist - they compensate the distribution network. AMFI's expenses are covered separately by the mutual fund industry. Printing and marketing are operational expenses borne by the AMC itself, not passed through loads.

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