How is trail commission calculated in mutual fund?

Trail Income signifies trail brokerage calculated on “Daily Average Assets” on the NAV of investment, paid every quarter. For illustration purpose, it is calculated here on a monthly basis. Also since it is an illustration, actual payout may differ as per the change in NAV due to market conditions.

How commission is calculated in mutual fund with example?

For example, Broker X procures 1, 00,000 units on 1st January 2010 and the rate of commission is 0.50 \% p.a. payable monthly and the investor redeems 50000 units on 15th March 2010. Cumulative NAV (addition of all the NAV from 1st of the month to the end of the month) is Rs. 1500.00 in January, Rs.

What are mutual fund trailing fees?

A trailing commission is the annual service commission paid by the mutual fund company to your dealer for ongoing services and adivce. It is paid to the dealer out of the MER and is paid for as long as you hold units in the fund. Commission rates can range from between 0.25\% and 1\%.

What is Trail commission?

Trail commission means a commission or fee paid to investors by fund managers, fund platforms, advisers, or any other person acting as an intermediary between the fund and the investor. Trail commission typically originates from the annual management charge paid by the fund to the fund manager.

What is the commission on mutual funds?

Typically mutual fund distributors earn around 1\% commission on the value of their clients’ equity schemes and 0.5\% on debt schemes. The sluggish growth in commissions stood in contrast to the huge rally in India’s equity market and hence mutual fund assets over the past year.

What is agent commission in mutual fund?

The agent charges a commission from a client for providing his services and this amount is generally . 5\% to 2\% of the investment. The client can negotiate this commission’s worth on the quality of advice his agent provides. this is a recurring commission and the agent gets a commission every time the client invests.

How is mutual fund distributor commission calculated?

this is a recurring commission and the agent gets a commission every time the client invests. For example, if a person invests Rs 10,0000 every month and his agent’s commission is 1\%, the Agent gets Rs 1000 every month as a part of the commission from a client.

What is a trailing commission fee?

A trailing commission is a fee that you pay a financial advisor each year that you own an investment. The purpose of a trailing commission is to give an advisor an incentive to review a client’s holdings and provide advice. It is essentially a reward for keeping you with a particular fund.

What is upfront and trail commission?

An upfront commission is paid by the AMC to the distributor at the time when the sale is made and trail commission is paid annually as long as the funds remain with the AMC. The total expense ratio (TER) is a measure of the total costs associated with managing and operating a mutual fund.

What is the commission of mutual fund agents in India?

Your mutual fund agent will receive it whenever you invest newly. This commission varies from product to product, high in ELSS funds (around 4.5\% to 1\%), equity schemes (around 0.5\% to 2.5\%) and low in debt funds (around 0.2\% to 0.8\%).

How is commission calculated for mutual funds?

What is trail commission in mutual funds?

Trail commission is the commission paid to an agent by asset management companies. This commission is paid to the agent every year till you remain invested in the mutual fund. Trail commission is calculated based on the percentage of the asset under management. Trail commission is part of the expense ratio of the fund.

What is the average trailing commission for an investment?

However, it is not uncommon for a trailing commission to range between 0.25\% to 0.50\% of the total investment per year. That is a significant amount, and it builds up year after year.

What is the commission rate of a mutual fund agent?

The commission rate varies from fund house to fund house and type of mutual fund. The upfront payment for equity mutual fund is higher compared to debt funds. Trail Commission is the main source of earning for many mutual fund agents. Trail commission is the commission paid to an agent by asset management companies.

Can I claim the trail commission for myself?

Many advisers and intermediaries rebate some or all of the trail commission you are paying on an investment. This means you could claim some or all of the trail commission for yourself, usually in return for paying a transaction fee, annual charge or both.