Mutual Fund Disclosure of Commission/Brokerage
We at Sanriya Finvest Pvt. Ltd.(SFPL) AMFI registration No: ARN-193359 believe in complete transparency. We don’t charge the investor any fees. Instead, we earn a small commission from the mutual fund companies for the services we provide. We offer regular plans for mutual fund schemes, which include this commission. In accordance with the SEBI circular: SEBI/IMD/CIR No. 4/ 168230/09, the details of the Category / Scheme commission earned by Sanriya from various Asset Management Companies (AMCs) are as below:
| Scheme Type | Trail-1st Year | Trail-2nd Year onwards |
| Arbitrage Funds | 0.05%-0.60% | 0.05%-0.60% |
| ELSS | 0.10%-1.5% | 0.15%-1.25% |
| Equity / Hybrid Equity Balance Funds | 0.10%-1.5% | 0.15%-1.25% |
| Fixed Maturity Plans | 0.05%-0.50% | 0.05%-0.50% |
| Fund of Funds | 0.05%-1.00% | 0.05%-1.00% |
| Gilt Funds | 0.05%-0.65% | 0.05%-0.65% |
| Hybrid Debt/Monthly Income Plans | 0.05%-0.75% | 0.05%-0.75% |
| Income Funds | 0.01%-1.0% | 0.05%-1.0% |
| Index Funds | 0.01%-0.60% | 0.0%-0.75% |
| Liquid/Ultra Short Term Schemes | 0.01%-0.65% | 0.05%-0.65% |
| Short Term Income Funds | 0.01%-0.65% | 0.05%-0.65% |
*Rates provided are for reference only, updated based on the information received from Asset Management Companies (AMCs). The rates mentioned are indicative and will be updated as received from AMCs. Commissions are subject to GST, clawback, and changes without prior notice, as agreed between SFPL and AMCs. SFPL has opted out as a distributor, meaning no transaction charges will be deducted by AMCs for transactions under SFPL’s ARN code. Commission details are available from your service relationship manager upon request. This information is general and does not constitute financial or other advice. Investing in mutual funds involves market risks. Customers should carefully read the scheme-related documents or key information documents before investing. Clients should note that mutual fund prices and net asset values may fluctuate based on market conditions. Past performance does not guarantee future results and is shared for reference only. Sanriya Finvest Pvt. Ltd. (SFPL) and its staff, as AMFI-registered sub-distributors, prepare investment proposals upon client request based on the client’s objectives and preferences. These proposals are for general information only; clients can accept or reject them. SFPL is not liable for any losses arising from using this information. Clients should consult legal, investment, and tax advisors before making decisions.
Brokerage Disclosure in CAS: The brokerage paid to mutual fund distributors is mentioned in the Consolidated Account Statement (CAS) sent to investors. For the half-year ending in March or September, the CAS includes gross commissions paid by mutual funds and AMCs. This includes direct payments and benefits like gifts, rewards, trips, or event sponsorships.
Commission Calculations: Trail commissions are calculated daily based on the distributor’s assets under management (AUM) and paid monthly. These commissions come from the expense ratio, which is deducted daily. Investors don’t bear additional costs, as funds explicitly disclose the expense ratio. No hidden fees impact the Net Asset Value (NAV). Distributors earn commissions as long as the investor remains in the fund. Distributors pay *18% GST on the payouts they receive from mutual funds.
How is the trail commission calculated?
The trail commission is calculated using the following formula: Trail Commission = (Daily Product × Rate/100 × 1/365)
For example:
The daily product is calculated by multiplying the balance units by the cumulative tentative NAV.
Let’s assume a Mutual Fund Distributor (MFD) invests in a mutual fund on 1st January 2024 by procuring 10,000 units at an annual commission rate of 0.50%, with a cumulative NAV of 10 for the entire month. The fund performed well in February, and its NAV increased to Rs 20 for the entire month. However, in March, the fund performed poorly, and its NAV dropped to Rs 5 for the whole month.
So, the commission for each month would be:
- January: Commission = (10,000 × 10 × 0.50% × 31/365) = ₹42.46
- February: Commission = (10,000 × 20 × 0.50% × 28/365) = ₹76.71
- March: Commission = (10,000 × 05 × 0.50% × 31/365) = ₹21.23
The commission is directly linked to the NAV and the mutual fund’s performance. If the fund performs well, the NAV increases, leading to a higher commission for the MFD. On the other hand, if the fund underperforms, like in March, when the NAV dropped to 5, the commission significantly decreases.
This creates a win-win situation for both the investor and the MFD:
- For the investor: They benefit from better returns if the fund performs well.
- For the MFD: Their brokerage increases when the fund performs better.
This performance-based structure ensures that the MFD prioritizes the investor’s wealth. If the investor earns, the MFD also benefits. The MFD’s earnings are directly linked to their ability to choose and manage high-performing funds, ensuring mutual growth.