Subbu's Solution

I am an existing investor of Quantum MF. I would like to know why the exit NAV (repurchase price) is lower than Actual for QLTEF. Some people are saying that this is as good as having higher expense ratio with hidden charges. - Pradeep
Mr. Pradeep, thank you for writing to us. It is such questions that help us clear the air in the investors mind regarding his/her mutual fund investments. Firstly, Expense ratio and Exit load are two very different things. The expense ratio is the annual fee that all funds or ETFs charge their investors. QLTEF has expense ratio of 1.25%, which is one of the lowest in the industry. Repurchase or redemption price is the price or NAV at which a scheme purchases or redeems its units from the investors. Therefore, while I assure you at Quantum there is no hidden charges, there is a formula that calculates at what rate the scheme will buyback your units. This formula is prescribed by the market regulator SEBI to all mutual fund houses:
Repurchase Price = Applicable NAV *(1 - Exit Load, if any)
So, at the time of redemption what happens is your repurchase price is dependent on the exit load of the scheme, which again depends on the number of days the units were allotted to you. The exit loads are applied on a variable basis depending on the term of the investment. Below is the Exit load for QLTEF.
Exit load for QLTEF

The main intention behind charging high exit load is to make sure that the fund appeals to investors who are looking at long term investments and discourage speculators who wish to make quick money in a short span. This is especially true for equities, where investments are meant to be for long term. Moreover, if the investor stays invested for two years there is no exit load. In this case, the repurchase price will be that day’s actual NAV.

Product Label

Name of the SchemeThis product is suitable for investors who are seeking*Riskometer
Quantum Long Term Equity Value Fund

(An Open Ended Equity Scheme following a Value Investment Strategy)
• Long term capital appreciation

• Invests primarily in equity and equity related securities of companies in S&P BSE 200 index

Investors understand that their principal will be at Moderately High Risk
* Investors should consult their financial advisers if in doubt about whether the product is suitable for them.
Mutual Fund investments are subject to market risks, read all scheme related documents carefully.


Subbu's Solution is authored by I. V. Subramaniam. I. V. Subramaniam is a director of Quantum Asset Management Company Private Limited. The responses expressed here are strictly for information and explanation purpose only. The responses are meant for general reading purpose and not to be considered as an investment advice / recommendation. The responses are not intended to be an offer or solicitation for the purchase or sale of any financial product or instrument or units of the Mutual Fund. Readers are advised to seek independent professional advice and arrive at an informed investment decision before making any investments. The Sponsor, The Investment Manager, The Trustee, their respective directors, employees, affiliates or representatives shall not be liable for any direct, indirect, special, incidental, consequential, punitive or exemplary damages, including lost profits arising in any way from the information contained in the responses.

Risk Factors: Mutual Fund investments are subject to market risks, read all scheme related documents carefully.

Please visit - to read Scheme Specific Risk Factors. Investors in the Scheme(s) are not being offered a guaranteed or assured rate of return and there can be no assurance that the scheme's objective will be achieved and the NAV of the scheme(s) may go up or down depending upon the factors and forces affecting securities markets. Investment in mutual fund units involves investment risks such as trading volumes, settlement risk, liquidity risk, default risk including possible loss of capital. Past performance of the Sponsor / AMC/ Mutual Fund does not indicate the future performance of the Scheme(s). Statutory Details: Quantum Mutual Fund (the Fund) has been constituted as a Trust under the Indian Trusts Act, 1882. Sponsor: Quantum Advisors Private Limited. (liability of Sponsor limited to Rs. 1,00,000/-) Trustee: Quantum Trustee Company Private Limited. Investment Manager: Quantum Asset Management Company Private Limited (AMC). The Sponsor, Trustee and Investment Manager are incorporated under the Companies Act, 1956.

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