June 07 , 2012
An entry load is what gets knocked off your investment, the moment you enter a fund. Most of this (and more) typically goes to pay commissions to the broker through whom you have invested. Thankfully, from 1 August 2009, this has been scrapped by the regulator.
Think of the entry load like a sieve through which when your money passes, it shrinks in value. If you ever wondered why you were badgered by enthusiastic agents trying to sell you products, this is the explanation. It remains one even after scrapping of entry load, but less so. They get paid instead from the expense ratio you get charged.
As an example, say you invested Rs.10,000 in a fund that had a 2% entry load. The actual money invested in the fund would then be only Rs.9,800 since Rs. 200 would be the charged entry load.