Mutual and other Funds

37. ''In either model, the role of the distribution channel remains critical ,'' In this context explain the role of distribution channels.

Ans: Mutual Funds are marketed through a variety of distribution channels. The Funds Sponsor may either directly market them to the customer or they may be distributed through intermediaries or middlemen,who in turn may sell them to customers. For example , Fund Sponsors may employ wholesalers to market their Fund to retail brokers, who in turn may promote the same to investors. A new product of any Mutual Fund may have the desired qualities but that does not ensure its spontaneous acceptance by the customers. Its sucess depends on the use of an appropriate distribution and promotion strategy.