With no commissions, direct plans of mutual funds offer higher returns than regular plans of mutual funds. In 2013, SEBI introduced “direct plans” or “direct mutual fund plans,” that enables the investors to invest directly with the fund house, circumventing the middlemen and also the agent commissions that tag along with them. This means that the in-built commission of upto 1.5% (also called as Trail fee), that the fund house offers to the agents or brokers as an incentive to market their scheme, would be added to the invested corpus, enabling the investors to get more returns on their mutual fund investments.
Since this trail fee/commission is an annually recurring feature, over a long period it has a significant impact on your mutual fund returns. Direct mutual fund plans, nevertheless, do not change the contours of the final product. The fund remains the same whether a regular plan or a direct plan. It is the same scheme, same portfolio, same fund manager, same objective – albeit, with a reduced cost structure. Therefore, in the direct vs. regular mutual funds debate, direct mutual funds usually win for economic reasons.
Learn how to earn more from Direct Plans of Mutual Funds
Since the direct mutual fund investment is with the fund house itself, there is no commission charged, ensuring higher returns than regular mutual funds.
Since distributors don’t earn a commission via direct mutual fund plans, the recommendations that they give are not biased; that is, they don’t recommend the schemes that give them higher commissions.
Existing investments in regular plans can easily be switched to direct mutual fund plans, ensuring higher returns from the entire portfolio.
Moneyfront’s sign-up process is entirely paperless. The documentation rigmarole is thrown out of the window, making the entire process extremely smooth and easy. One can, with just a click, switch their existing investments in regular plans to direct mutual fund plans, and earn higher returns on the entire portfolio. We guide investors through each step, including information about exit & tax implications (if any) incurred from the switch.
We offer personalised, advisory information and assistance to those who are looking for recommendations on building their ideal portfolio. Our reports section shares data that one can customise and view according to the personal monetary objectives.
We advise the investor on how to invest in direct mutual funds, and offer the best direct mutual fund plans options.
Moneyfront also provides many other features, such as opening a minor’s account, opening up a family or joint accounts, etc.; we don’t like to brag, but we are one of the best direct mutual fund platforms in India.
Lastly, our monthly charges are cheaper than a cup of cappuccino at a coffee shop. One coffee a month is what it will cost to get paperless investing, model portfolios, automated as well as personalised advice, customised reports, varied analytics, and the comfort of ubiquitous investing!