The best exercise to reduce fat is one that gets your heart rate elevated. It could be swimming, running, hiking biking, lifting weights, rowing, soccer, aerobics, etc.
We can go to the gym and get on the cardio machine and start walking. For a healthy fitness plan, that is a good start. But if you are looking for an exercise to reduce fat, then the best way is increase the pace of your walk so that you increase your heart rate.
When the heart rate is elevated to approximately 55% to 85% of its maximum, your body really starts to work. That work requires energy and calories are burned in order to create that energy. Fat is one of the fuel sources your body uses to create that energy.
When you increase the level of intensity that you workout and your heart starts really pumping, the time span necessary to burn a certain amount of calories decreases as well. For example, I could go for a walk on a treadmill at 3.0 miles per hour and burn 150 calories in an hour. However, if I ran at a speed of 6.0 miles per hour, I could burn 150 calories in 15 minutes or less.
This same theory applies to resistance training. If you are performing a weight lifting exercise to reduce fat and the weight being lifted is too light, your body is not being worked very hard. Therefore, only a minimal number of calories are being burned during the performance of the exercise. As a result, there is little use for the fat fuel source and ultimately a little to none reduction in fat occurring.
So in your attempt to exercise to reduce fat, make sure and perform your workouts at a higher intensity. Doing so will get the heart pumping and calories and fat burning.