UTI Mutual Fund Changes Exit Load Structure for Two Important Schemes
UTI Mutual Fund has revised the exit load structure of two hotly-traded schemes of UTI Mutual Fund that are UTI Multi Asset Allocation Fund and UTI Long Duration Fund. This applies to new investments on or after September 5, 2024, with flexibility extended to investors where it enhances liquidity, thereby curtailing the penalties on early liquidations.
Now in the case of the UTI Multi Asset Allocation Fund, this policy on exit load has been considerably relaxed. While earlier one was charged a 1% exit load if a chunkier redemption over and above 10% units was made within 365 days of investment, under the revised structure, this 1% charge will be levied only in case the redemption is made within 30 days of purchase. The reduction in the holding period greatly decreases the lock-in period for investors, thus enabling them to reach their funds much earlier without additional costs. This shorter holding period is of relative advantage to those who appreciate liquidity yet would want to enjoy the benefits accruable from multi-asset investments. Therefore, this change makes the UTI Multi Asset Allocation Fund relatively more attractive to short-term investors or those who desire quicker access to their funds without penalty.
The more dramatic change has taken place in the case of the UTI Long Duration Fund, which essentially attracts long-term investors. Under the old policy, a 1% exit load was charged if more than 10% of the units were redeemed within three years. The revised structure has completely washed off the exit load for this scheme. Quite simply, there are no more exit charges under this scheme, irrespective of how long the investor holds these units. This withdrawal of the exit load manifold enhances the attractiveness of the fund, especially to long-term investors who seek more flexibility and liquidity. Without an exit penalty, even a more diversified segment of investors might be lured in, who previously abstained from this particular investment due to its rather extensive holding period to avoid charges.
These changes indicate that UTI Mutual Fund is willing to adapt to the needs of changing investors. The reduced lock-in period for the UTI Multi-Asset Allocation Fund and the elimination of exit loads for the UTI Long Duration Fund give more freedom to investors and flexibility in investment and, therefore, become more appealing for different kinds of investment strategies.
On the whole, there are considerable advantages in the revised exit load structures of UTI Mutual Fund. The UTI Multi Asset Allocation Fund has a more manageable lock-in period that can afford easier liquidation and therefore access to funds, while the absence of an exit load in respect of the UTI Long Duration Fund bolsters its liquidity, which is expected to provide a lot of comfort for the long-term investor, looking for greater flexibility in exiting. These moves are bound to have salutary effects on investors’ confidence and on the relative attractiveness of the schemes.
