How Direct mutual-fund plan works
Direct and regular plans of the same scheme share the portfolio and fund manager but have separate NAVs because their expenses differ. Direct describes the distribution route; it does not mean the scheme is safer, better performing or accompanied by advice.
An example
If the regular plan costs 1.5% a year and the direct plan costs 0.8%, the 0.7-point gap reduces the amount left to compound in the regular plan, before other differences.
Why it matters for your family
A family can invest directly on its own or pay a registered adviser separately. Compare service, tax and switching costs before moving an existing regular-plan holding.
Questions people ask
- What does Direct mutual-fund plan mean?
- A direct plan is a mutual-fund plan bought without routing the investment through a mutual-fund distributor.
- Why does Direct mutual-fund plan matter for a family?
- A family can invest directly on its own or pay a registered adviser separately. Compare service, tax and switching costs before moving an existing regular-plan holding.
- Where can I verify information about Direct mutual-fund plan?
- Start with AMFI Investor Corner, linked on this page, and the current official document for the product or tax year involved.