Miraes equity schemes may not figure in distributors recommended list

By Indiatimes28 days ago

Mirae Asset Mutual Fund has slashed the commission it pays distributors to sell its products in an unprecedented move that has miffed these intermediaries. The fund house said the step is aimed at discouraging distributors to sell their products to reduce flows into its schemes mainly Midcap, Focused and Tax-Saving. Distributors claim the asset manager has cut fees only to boost its profitability. The drop in distributor commissions will however not reduce investors annual costs in Miraes schemes.

There is not enough liquidity in the markets especially in the midcap space. We are worried about the pace of flows into these funds, said Swarup Mohanty, CEO, Mirae Asset Mutual Fund. The damage which higher inflows can do to a fund can go unnoticed.

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Mirae will now pay an annual trail commission of 60-70 basis points for fresh flows as against 120-140 basis points earlier. It has also asked distributors including banks and financial advisors to remove its schemes from the recommended list.

Distributors said they will not push Mirae schemes because of the commission cuts.

Our commission is halved and so we will not sell these schemes but offer them to those who ask for it, said a large Mumbai based mutual fund distributor on condition of anonymity. Many investors themselves want to invest in Mirae given the strong performance of its equity schemes and we have no choice but to offer them these schemes.

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