Will ELSS mutual fund flows moderate post the ban on upfront commissions? Will be interesting to see the fund flows from Jan 2019

SEBI in September 2018 had announced that mutual funds cannot pay upfront commissions and must adopt a full trail model

All commission and expenses, etc. shall necessarily be paid from the scheme only and not from the AMC/Associate/Sponsor/Trustee, or any other route. Further, the mutual fund industry must adopt the full trail model of commission in all schemes without payment of any upfront commission or upfronting of any trail commission.

Before the ban on upfront, AMCs very paying the entire commission for the 3 years upfront. There were also instances where AMCs were paying additional incentives along with the upfront commissions.

With mutual funds being push products, will the flows sustain given that the incentives have reduced for mutual fund distributors to push these funds?

Stepping back, here are the ELSS flows since Apr 2016. Will be really interesting to see how the flows shape up from Jan 2019.

Will ELSS flows moderate post the ban on upfront commissions? Will be interesting to see the fund flows from Jan.

What do you think?

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This

with this

lead to this

There you go, its happening.

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