commission paid to distributor/Agent on our investments in mf are from the amount we send with application or subsequent repurchases or is it paid by the fund house directly from their earnings?
2 Answers
Dear Sunil,
Every mutual fund scheme is allowed to charge the assets of the investors a fee (for marketing expenses, agents' commission, administrative expenses etc), together called as an expense ratio.
MFs deduct these expenses from its fund assets and then calculate the Net Asset Value.
Commissions are two types - Upfront commission & Trail commission (periodical).
Thank you Mr. Sreekanth for the information and the prompt reply. From your answer o my question I understand that the amount that we send for purchase if Units in MF are invested completely in our name and no deductions are made in it. The commission etc is deducted from the Fund's assets and we pay for it in terms of the expense ratio and not directly.
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