Trail commission in mutual funds

Sat, 16 May 2026 00:00:00 +0000

Trail commission is an ongoing, recurring fee paid by an Asset Management Company (AMC) to a mutual fund distributor as long as the investor’s assets remain invested through that distributor. Trail commission is expressed as a percentage per annum of the investor’s daily average Assets Under Management (AUM) and is accrued daily by the AMC, then paid to the distributor periodically (typically monthly). The trail-commission framework is the principal mechanism through which AMFI-registered distributors are compensated for distributing mutual fund schemes in India, and is the only permissible form of distributor remuneration following the SEBI ban on upfront commissions that took effect from 22 October 2018.

Distributor Remuneration on WebNotes

Trail commission in mutual funds