Exit loads are something many mutual fund investors tend to overlook – until they decide to redeem early and end up paying a penalty. While most equity funds charge 1% exit load for redemptions within 12 months, some funds have taken this a step further with a steep 2% exit load applicable for longer durations ranging from 180 days to 365 days. Why do these funds levy such a high exit load? Is it a disadvantage or does it actually support long-term wealth creation for investors? Today, we deep dive into 3 mutual fund schemes that currently have a 2% exit load and analyse their investment objective, performance, risks, and whether the high exit load should matter to long-term investors.
Earlier we covered 10 Mutual Fund Schemes with High Expense Ratios as part of our investors education.
What Is Exit Load in Mutual Funds?
An exit load is a fee charged by mutual fund companies when an investor redeems units before a specified period. It is designed to discourage premature withdrawals and stabilise the fund’s investment strategy.
A higher exit load helps fund managers:
- Reduce sudden outflows
- Maintain stable AUM
- Invest confidently in long-term or high-conviction ideas
- Avoid forced selling of securities
Now, let’s look at the 3 mutual funds with a 2% exit load.
3 Mutual Funds With High Exit Load (2%)
| Mutual Fund Scheme | Exit Load % | Exit Load Applicable Within |
|---|---|---|
| Quantum Value Fund | 2.0% | 365 days |
| Parag Parikh Flexi Cap Fund | 2.0% | 365 days |
| Edelweiss Recently Listed IPO Fund | 2.0% | 180 days |
Deep Dive into these 3 Mutual Funds With High Exit Load (2%)
#1 – Quantum Value Fund
Investment Objective
Quantum Value Fund follows a disciplined value-investing approach, identifying fundamentally strong companies trading at attractive valuations. It aims for long-term capital appreciation with controlled downside risk.
Mutual Fund Performance
- 3-Year CAGR: 17.25%
- 5-Year CAGR: 17.6%
- 10-Year CAGR: 13.55%
Why to Invest
- Pure value-style investing with a strong long-term track record.
- Stable and conservative fund management philosophy.
- Ideal for long-term investors seeking fundamentally strong opportunities.
Risk Factors
- May underperform during momentum-driven markets.
- Value stocks require longer holding periods to realise potential.
How High Exit Load Helps the Fund
A 2% exit load for 365 days discourages short-term trading, helping the fund maintain stable AUM and stick to its long-term value strategy without forced selling.
In terms of rolling returns, there are better funds from the value mutual fund category which we discussed in 5 Best Value Mutual Funds to Invest in 2025 based on Rolling Returns.
#2 – Parag Parikh Flexi Cap Fund
Investment Objective
This flexi-cap fund invests across Indian equities, global equities, and cash positions. It follows a value-conscious, quality-focused strategy aimed at stable long-term wealth creation.
Mutual Fund Performance
- 3-Year CAGR: 22.08%
- 5-Year CAGR: 21.26%
- 10-Year CAGR: 18.54%
Why to Invest
- One of India’s best-performing flexi-cap funds over the long term.
- Global diversification protects against domestic market volatility.
- Proven value-driven investing with strong downside protection.
Risk Factors
- Global exposure introduces currency and geopolitical risks.
- May underperform in fast-moving bull markets due to conservative valuations.
How High Exit Load Helps the Fund
A 2% exit load for 365 days ensures investor stability. This prevents abrupt inflows and redemptions, supporting the fund’s long-term, research-backed investment decisions.
This fund is consistent performer even from rolling returns perspective and one of the Favorite Mutual Funds from ChatGPT to invest in 2026.
#3 – Edelweiss Recently Listed IPO Fund
Investment Objective
The fund focuses on capturing growth opportunities in newly listed companies with strong future potential. It aims to benefit from early-stage expansion while managing IPO-related volatility.
Mutual Fund Performance
- 3-Year CAGR: 17.1%
- 5-Year CAGR: 16.9%
- 10-Year CAGR: Not applicable (fund not old enough)
Why to Invest
- Provides exposure to promising newly listed companies.
- Allows investors to participate in IPO-driven wealth creation without applying for IPOs directly.
Risk Factors
- Newly listed companies may have limited financial history.
- High volatility in new-age and emerging sectors.
- Short-term performance may be sentiment-driven.
How High Exit Load Helps the Fund
IPO trend cycles can cause sudden inflows and outflows. A 2% exit load within 180 days helps the fund reduce volatility, maintain liquidity, and avoid forced selling during temporary market corrections.
Since this fund invests in recently listed IPOs, the performance is highly volatile. This fund even crashed by 10% which we covered few months back at 11 Mutual Fund Schemes Lost 10% to 22% Returns in 2025.
Should Investors Worry About High Exit Load?
A 2% exit load may look concerning, but it should not matter if:
- You are a long-term investor
- You do not plan frequent switches or redemptions
- You prefer disciplined investing
In fact, high exit loads help funds maintain stable portfolios and invest confidently without fearing early outflows.
However, investors who prefer liquidity and may need short-term access to funds should choose schemes with lower or zero exit loads.
Conclusion
High exit load mutual funds are not necessarily negative. In many cases, they actually protect long-term investors by deterring short-term speculative entries and exits. The three funds discussed – Quantum Value Fund, Parag Parikh Flexi Cap Fund, and Edelweiss Recently Listed IPO Fund – have strong track records and well-defined strategies that benefit from stable AUM.
If you’re investing with a medium to long-term horizon, these schemes can be worthy additions to your portfolio. Just ensure your financial goals and liquidity needs align with the exit load structure.
- 3 Mutual Funds With 2% Exit Load If Redeemed Early (180–365 Days) - December 14, 2025
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