Press Release – In accordance with SEBI’s recent directive, where mutual funds are allowed to pay prescribed transaction charges for subscription application received through distributors, Quantum Mutual Fund, India’s first and only direct-to-investor mutual fund, has announced Zero transaction charges for all subscriptions received through distributors. The fund house has also published details of commissions paid to distributors – zero commissions paid since inception till date – on its website: www.QuantumMF.com.

The regulator’s recent guidelines permit Asset Management Companies (AMCs) to pay distributors a transaction charge of Rs.100 for existing investors and Rs.150 for first time investors as transaction charges for each subscription of Rs.10,000 and above. The AMC shall deduct the transaction charges from the subscription amount received from the investor and pay the same to the distributor. The balance amount will be invested in the scheme.

However, investors in Quantum Mutual Fund will not have to incur any such charges. The direct-to-investor fund house has announced “ZERO” transaction charges for all subscription applications received from distributors, which will ensure that there are no deductions made from the investor’s subscription amount. And continuing with its tradition of not paying commission, Quantum will not pay any transaction charges to the distributors.

Commenting on the introduction of these charges, Jimmy A Patel, Chief Executive Officer, Quantum Asset Management Company Pvt Ltd said, “Long term wealth creation is all about the magic of compounding. A miniscule deduction of Rs.100 or Rs.150 at the start could accumulate to a pretty decent difference in the final amount if you consider a compounded rate of growth. The differential keeps adding to the difference in amount. That’s the edge we are offering as a direct-to-investor mutual fund – an initial “Zero Deduction”.

Quantum Mutual Fund has always been a crusader for transparency in the commission structure of the mutual fund industry and has vocally admonished the practice of pushing products to investors for the sake of adding to the AuM corpus. This has been the primary reason why Quantum Mutual Fund was launched as a direct-to-investor fund house. Simply put, the fund house refused to work with distributors without declaring the commission paid to them, and as a result has paid zero commissions since its inception in 2006 till date.

With a view to provide its investors with complete information, Quantum has proactively published commission details, including brokerages paid for investment trades, in its Annual Reports. However, the fund house is not averse to working with distributors or paying them for their services. Its only fight has been that payments made should be declared and investors must know why they are being sold one fund over another.

Jimmy A Patel complimented SEBI on its pro-investor stance saying, “We have been known as the mavericks and the angry boys of the industry. And all because we lobbied against an opaque distribution system. We were the first mutual fund in India to have Zero entry loads. SEBI regularized this initiative in August, 2009. We have pushed for declaration of distributor fees since 2006, and we are ecstatic that the regulator has brought in much needed transparency via its recent circular. We believe that everyone including distributors need to get paid for the work they do – but those payments need to be revealed.”