Was reading about the liquid funds and came across this sentence on one of the sites:
Considering that liquid funds are ideally suited for investments that may be required to be redeemed at a short notice, most of the funds in this category do not have any exit load.
I know liquid funds can be redeemed in a day. But I don't understand what it is the connection between period before redemption and exit load. Does this means that since redemption can be done at very short period of time, it all happens electronically and thus does not involve much processing efforts on the side of fund house, thus there is no exit load?
I am absolutely new to finance so trying to understand what and most importantly why of it.
Also was trying to create a new
liquid-fund tag but poor reputations didn't allowed me to do so. So tagged
debt since liquid fund is a kind of debt-funds