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Top 10 Best Direct Mutual Funds to Invest

Updated on January 29, 2023 , 16507 views

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.


What are Direct Mutual Funds Investment?

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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Best Direct Mutual Funds to Invest in India

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.

Best Direct Mutual Fund Plans- Equity Category

FundNAVNet Assets (Cr)3 MO (%)6 MO (%)1 YR (%)3 YR (%)5 YR (%)2022 (%)
SBI Small Cap Fund - Direct Growth ₹124.314
↑ 1.95
DSP BlackRock Micro Cap Fund - Direct Growth ₹120.479
↑ 2.73
Templeton India Equity Income Fund - Direct Growth ₹93.8256
↑ 0.31
Sundaram SMILE Fund - Direct Growth ₹160.206
↑ 2.88
Templeton India Growth Fund - Direct Growth ₹479.179
↑ 5.08
Franklin India Smaller Companies Fund - Direct Growth ₹104.629
↑ 1.93
Franklin Build India Fund - Direct Growth ₹79.1702
↑ 1.19
Franklin India Technology Fund - Direct Growth ₹315.334
↑ 0.80
Franklin India High Growth Companies Fund - Direct Growth ₹77.1586
↑ 0.42
Franklin India Prima Plus - Direct Growth ₹1,071.75
↑ 8.89
Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 31 Jan 23

Best Direct Mutual Fund Plans- Debt Category

FundNAVNet Assets (Cr)3 MO (%)6 MO (%)1 YR (%)3 YR (%)5 YR (%)2022 (%)
UTI Money Market Fund - Direct Growth ₹2,601.11
↑ 0.50
UTI Liquid Cash Plan - Direct Growth ₹3,646.77
↑ 0.59
Franklin India Treasury Management Account - Regular Plan - Direct Growth ₹3,344.31
↑ 0.50
Edelweiss Liquid Fund - Direct Growth ₹2,872.48
↑ 0.54
Franklin India Savings Plus Fund Retail Option - Direct Growth ₹43.2062
↑ 0.01
HDFC Floating Rate Income Fund - Short Term Plan - Direct Growth ₹41.7896
↓ -0.01
UTI Treasury Advantage Fund - Direct Growth ₹3,009.85
↑ 0.50
UTI Short Term Income Fund - Direct Growth ₹27.7986
↑ 0.00
Axis Corporate Debt Opportunities Fund - Direct Growth ₹14.7858
↑ 0.00
Franklin India Income Builder Account - Plan A - Direct Growth ₹88.2578
↑ 0.04
Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 31 Jan 23

Best Direct Mutual Fund Plans- Hybrid Category

FundNAVNet Assets (Cr)3 MO (%)6 MO (%)1 YR (%)3 YR (%)5 YR (%)2022 (%)
UTI Balanced Fund - Direct Growth ₹276.497
↑ 1.69
Franklin India Balanced Fund - Direct Growth ₹200.571
↑ 1.15
BNP Paribas Balanced Fund - Direct Growth ₹20.5222
↑ 0.05
UTI Wealth Builder Fund - Direct Growth ₹49.1177
↑ 0.48
Axis Dynamic Equity Fund - Direct Growth ₹15.33
↑ 0.01
UTI SPREAD Fund - Direct Growth ₹30.9429
↓ -0.03
Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 31 Jan 23

All efforts have been made to ensure the information provided here is accurate. However, no guarantees are made regarding correctness of data. Please verify with scheme information document before making any investment.
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