NISM Certifications · NISM-Series-V-A: Mutual Fund Distributors · Fund Distribution and Channel Management Practices
Which of the following is a typical channel through which a mutual fund investor can buy units, besides a distributor, without paying distribution commission?
An investor can buy a direct plan through the AMC's website, office or its registrar and transfer agent, avoiding distribution commission. Regular plans bought through agents, banks or national distributors include commission and therefore have a higher expense ratio.
- ADirect plan via the AMC website or its registrarCorrect
- BRegular plan through an agent
- CRegular plan through a bank branch
- DRegular plan through a national distributor
Explanation
Direct plans are purchased directly from the AMC (website, office or RTA) and carry no distribution commission, hence a lower expense ratio. Regular plans, via any intermediary, include commission.
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