Dear Respected Sir ,
I am an Indian Resident investing in Mutual Funds . I understand all Mutual Fund Houses except U.T.I come under the purview of the SEBI ( Mutual Funds ) Regulations , 1996 . I understand since the past few years S.E.B.I. has been taking many steps to protect interests of Investors & towards this end has brought in many amendments to the above-mentioned Regulations . However , I beg your kind attention towards a few points I would like to clarify :
Under the current regulatory framework :
1) What are the total charges (as percentage of AUM) that a Mutual Fund Scheme can charge it's Unit Holder (under all expense heads combined , for e.g. admin costs , marketing expenses , selling expenses , etc) for Equity-Oriented & Debt-Oriented Funds ? In other words , are there any "masked" expenses that the investor may be getting charged other than the "expense ratio" ? Also , what is the maximum "expense ratio" that any scheme can charge ?
2) What is the total income (by way of commissions ,etc) that a Distributor can obtain from the Mutual Fund (which actually goes from the investor's pocket or Scheme Return ) other than the "trail" .
3) What is the "trail" currently being given by the Mutual Fund Houses to it's Distributors for Equity - Oriented & Debt-Oriented Schemes ?
4) Would it make any difference,now , if an investor invests in an N.F.O or an old scheme ? In other words , would he have to sacrifice any additional part from his Scheme Return other than the normal "expenses ratio" if he invests in an "N.F.O" ?
5) Also in the current scenario , can the Distributor benefit , in any way ,by encouraging the investor (his client) to keep churning his Portfolio frequently ? In other words does he get any portion from the "Exit Load" that the Mutual Fund charges it's customer ?
6) What is "C.D.S.C." & does it still exist or has it been abolished ?
7) In case an Investor changes his Distributor after a certain amount of time , would the "Trailing Fees" for the investments made under the old Distributor be paid to the old Distributor or would they be paid to the new Distributor .
8) I understand that "trail charges" are deducted from the NAV even if an investor has invested directly into the Mutual Fund Scheme . Are these "Trail Charges" over & above the charges deducted under "Expense Ratio" or are they included in the "Expense Ratio" ?
I would be greatly obliged , Sir , if you could answer these questions of mine & remove my confusion . In case you do not have the answer to these questions , it would be very kind of you , Sir , if you could forward this e-mail to someone who can answer these queries .
Many Thanks .
I am an Indian Resident investing in Mutual Funds . I understand all Mutual Fund Houses except U.T.I come under the purview of the SEBI ( Mutual Funds ) Regulations , 1996 . I understand since the past few years S.E.B.I. has been taking many steps to protect interests of Investors & towards this end has brought in many amendments to the above-mentioned Regulations . However , I beg your kind attention towards a few points I would like to clarify :
Under the current regulatory framework :
1) What are the total charges (as percentage of AUM) that a Mutual Fund Scheme can charge it's Unit Holder (under all expense heads combined , for e.g. admin costs , marketing expenses , selling expenses , etc) for Equity-Oriented & Debt-Oriented Funds ? In other words , are there any "masked" expenses that the investor may be getting charged other than the "expense ratio" ? Also , what is the maximum "expense ratio" that any scheme can charge ?
2) What is the total income (by way of commissions ,etc) that a Distributor can obtain from the Mutual Fund (which actually goes from the investor's pocket or Scheme Return ) other than the "trail" .
3) What is the "trail" currently being given by the Mutual Fund Houses to it's Distributors for Equity - Oriented & Debt-Oriented Schemes ?
4) Would it make any difference,now , if an investor invests in an N.F.O or an old scheme ? In other words , would he have to sacrifice any additional part from his Scheme Return other than the normal "expenses ratio" if he invests in an "N.F.O" ?
5) Also in the current scenario , can the Distributor benefit , in any way ,by encouraging the investor (his client) to keep churning his Portfolio frequently ? In other words does he get any portion from the "Exit Load" that the Mutual Fund charges it's customer ?
6) What is "C.D.S.C." & does it still exist or has it been abolished ?
7) In case an Investor changes his Distributor after a certain amount of time , would the "Trailing Fees" for the investments made under the old Distributor be paid to the old Distributor or would they be paid to the new Distributor .
8) I understand that "trail charges" are deducted from the NAV even if an investor has invested directly into the Mutual Fund Scheme . Are these "Trail Charges" over & above the charges deducted under "Expense Ratio" or are they included in the "Expense Ratio" ?
I would be greatly obliged , Sir , if you could answer these questions of mine & remove my confusion . In case you do not have the answer to these questions , it would be very kind of you , Sir , if you could forward this e-mail to someone who can answer these queries .
Many Thanks .