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.