Third-Party Distributor

AAA

DEFINITION of 'Third-Party Distributor'

The name given to institutions that sell or distribute mutual funds to investors for fund management companies without direct relation to the fund itself. For mediating these transactions, third-party distributors receive a portion of the trailer fees associated with mutual fund sales for acquiring new business.

INVESTOPEDIA EXPLAINS 'Third-Party Distributor'

This arrangement works well for fund companies that don't have the necessary resources to enter new markets and instead decide to outsource to existing fund marketing companies.

RELATED TERMS
  1. Third Party

    An individual or entity that is involved in a transaction but ...
  2. Fund Manager

    The person(s) resposible for implementing a fund's investing ...
  3. Mutual Fund

    An investment vehicle that is made up of a pool of funds collected ...
  4. Trailer Fee

    A fee that a mutual fund manager pays to a salesperson who sells ...
  5. Portfolio

    A grouping of financial assets such as stocks, bonds and cash ...
  6. Bear Fund

    A mutual fund designed to provide higher returns when the market ...
Related Articles
  1. Should You Follow Your Fund Manager?
    Mutual Funds & ETFs

    Should You Follow Your Fund Manager?

  2. The Lucrative World Of Third-Party Marketing
    Professionals

    The Lucrative World Of Third-Party Marketing

  3. Mutual Fund Basics Tutorial
    Mutual Funds & ETFs

    Mutual Fund Basics Tutorial

  4. Cut Your Tax Bill With Donor-Advised ...
    Taxes

    Cut Your Tax Bill With Donor-Advised ...

comments powered by Disqus
Hot Definitions
  1. Ghosting

    An illegal practice whereby two or more market makers collectively attempt to influence and change the price of a stock. ...
  2. Elasticity

    A measure of a variable's sensitivity to a change in another variable. In economics, elasticity refers the degree to which ...
  3. Tangible Common Equity - TCE

    A measure of a company's capital, which is used to evaluate a financial institution's ability to deal with potential losses. ...
  4. Yield To Maturity (YTM)

    The rate of return anticipated on a bond if held until the maturity date. YTM is considered a long-term bond yield expressed ...
  5. Net Present Value Of Growth Opportunities - NPVGO

    A calculation of the net present value of all future cash flows involved with an additional acquisition, or potential acquisition. ...
  6. Gresham's Law

    A monetary principle stating that "bad money drives out good." In currency valuation, Gresham's Law states that if a new ...
Trading Center