Mutual Fund schemes, offer two plans- Regular and Direct. Most of the investors Investing in Mutual Funds usually prefer regular funds, but nevertheless, the interest for direct funds amongst new investors has let to increase in demand. The key Factor that differentiates between both these plans are expense ratio, the direct plan’s expense ratio is less as compared to that of a regular plan.
Direct plans are not separate schemes, but they are a variation of the regular plan with a lower expense ratio. So, an investor who wants to invest in a Mutual Fund can either opt for a regular plan or a direct plan. Ideally, an investor who can independently invest in Mutual Funds without seeking the help of an advisor can invest in direct plans.
Let’s learn more about direct fund investments, along with some of the best direct mutual funds to invest.
Direct funds are available through a limited number of channels. An investor can mainly invest through the fund house itself, a very few third party securities intermediaries, RTAs such as CAMS/Karvy, and authorized local representatives of the fund house. Mostly, in direct mutual fund investments, no arn (Application Reference Number) is quoted in the investor’s application. Therefore, the commission paid to the investors is very low or sometimes nil. This decreases the cost of customer acquisition for the AMC.
Other than the expense ratio, direct plans are also those where the fund house does not charge distributor expenses/transaction charges/trail fees. The Net Asset Value (NAV) of the mutual fund-direct plan can be higher compared to a regular mutual fund plan.
As the expense ratio of the direct plan is lower, it is said that the investors would get higher returns in comparison to regular plans. A return of about 0.5 percent to 1.5 percent would be higher, depending upon the fund house expense ratio. So, ideally, investors who want to increase their returns by way of reducing the expense ratio can invest in direct mutual fund plans.
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Here are some of the best direct mutual fund plans based, on- equity & hybrid 3 years returns, debt on 1 year returns, that you can consider while investing.
Fund NAV Net Assets (Cr) 3 MO (%) 6 MO (%) 1 YR (%) 3 YR (%) 5 YR (%) 2022 (%) DSP BlackRock Micro Cap Fund - Direct Growth ₹151.855
₹11,651 18.2 27.2 29.2 34.9 19.8 1.4 SBI Small Cap Fund - Direct Growth ₹147.421
₹20,018 12.4 19.5 21.7 32.6 20.1 9.3 L&T Business Cycles Fund - Direct Growth ₹30.3949
₹643 9.8 19.6 21.2 27.5 13.2 6.5 Mirae Asset Emerging Bluechip Fund - Direct Growth ₹121.086
₹27,948 12.7 17.4 15.9 24.6 17.2 -0.5 Edelweiss Economic Resurgence Fund - Direct Growth ₹29.387
₹1,295 8.9 14.7 16.8 24.3 13.8 2.4 LIC MF Tax Plan - Direct Growth ₹124.691
₹952 8.3 15.5 14.3 21.2 11.8 -0.5 IDFC Premier Equity Fund - Direct Growth ₹162.766
₹6,066 9.8 13.1 11.8 20.5 9.7 -0.7 Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 22 Aug 23 Fund NAV Net Assets (Cr) 3 MO (%) 6 MO (%) 1 YR (%) 3 YR (%) 5 YR (%) 2022 (%) HDFC Floating Rate Income Fund - Short Term Plan - Direct Growth ₹43.8203
₹17,080 2.1 4.3 7.8 5.9 7.1 4.8 Mahindra Liquid Fund - Direct Growth ₹1,505.11
₹672 1.7 3.5 6.8 4.7 5.4 5 Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 22 Aug 23
No Funds available.
No Funds available.
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