This website is purely ACADEMIC in nature and NOT a stock market recommendation service or a tip provider. No live data or feeds are provided and all information is historic only. Information is provided for ease of understanding for the purpose of learning. Accuracy of definitions etc is not mantained. I am not a SEBI or IRDA registered.

Commission in Mutual Funds

From Asuku.com
Jump to:navigation, search

Mutual Fund Distributors assist their investor clients by doing the necessary paper work / documentation and introduce them to the Asset Management Company (AMC).

Hence, they need to be compensated.

This compensation will be in the form of a commission.

Broadly speaking, there are two types of commissions

  1. Upfront commission
  2. Trail commission

Upfront commission is a one-time payment that an AMC pays a distributor on selling a mutual fund scheme to an investor.

Trail commission, on the other hand, is a recurring fee paid to a distributor until the investment is withdrawn.

Trail commission is calculated on an yearly basis and paid on a monthly basis.

Related Lessons