The first distributor used to get 120-140 paise on 3 schemes.
Now it has been reduced from 60 to 70 paise on all three schemes.
Mirai Asset Mutual Fund has reduced the commission paid to distributors (agents) in its 3 schemes. Its agents are angry with this. However, the schemes whose commissions have been cut have performed better in the last 1 year.
Commission reduced on mid-cap, focused funds and tax funds
Among the schemes that Mirai has deducted from its commissions has been a mid-cap fund that was launched about 20 months ago. Its Asset Under Management (AUM) is Rs 4,224 crore. It has given 90% returns to investors in 1 year. Similarly, commission has also been cut for Mirai Asset Focused Fund. The fund has given 79% return to investors in 1 year. Its AUM has been Rs 5,472 crore.
The third fund is Mirai Asset Tax Saver, a five-year-old scheme. It has given an advantage of 77% to investors in 1 year. Its AUM has been Rs 6,934 crore.
60-70 will get commission
Mirai will now pay a commission of 60-70 paise on newly arrived investments in these schemes as against 120 to 140 paise earlier. It has asked distributors and banks and financial advisors to remove the scheme from their list in which they are advising investors to buy it. Mirai actually wants investors to invest less in these schemes.
Agents do not sell this scheme fast
Mirai says that this has been done so that agents do not sell these schemes very fast. Distributors say they will no longer sell the Mirai scheme. A large distributor in Madhya Pradesh said that Mirai’s decision means that there may be risks in the future. Also, due to the arrival of investor data, they can also promote direct selling.
This scheme does not require much investment
Mirai says he no longer needs much investment in these schemes. Whereas the distributors say that the fund house has cut the commission to increase its profit. However, this decision of the fund house will not affect the annual cost of the investors. Fund houses believe that there is not much liquidity in the market, especially in the mid-cap sector.
May affect returns
Analysts believe that more money coming into any scheme means that its returns could be affected in the future. Or it can have an impact on investors withdrawing money. Distributors say that when our commission is decreasing, why should we sell such a product. However, if an investor asks, we will definitely give it to this scheme.
It has been done before
Earlier, SBI and Mirai had imposed a cap on SIPs and lump-sum investments in certain schemes. Whenever mid and small caps move, fund houses make such plans on new investments. Focused exposure has been 9.79% in Infosys, 9.28% in HDFC Bank, 7.70% in ICICI Bank, 7.39% in Reliance Industries, 5.16% in Axis Bank, 3.95% in Bharti Airtel. Its investment in banks and software sector has been 36%.
Mid-cap investment has been 4.36% in SRF, 4.25% in Federal Bank, 4% in Axis Bank, 3.23% in SBI. The bank sector has 14.25%, consumer durables 12% and pharma 8.28%.
