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Direct Vs Regular Mutual Fund Investment Plans

Updated on August 28, 2025 , 3659 views

While most of the investors invest in Mutual Funds through regular plans, but the rising popularity of direct plans amongst the new investors has led to an increase in demand. Regular plans have been available to the investors for a much longer time than direct Investment plan. The first direct mutual fund plan got introduced in January 1, 2013.

Regular-vs-direct-fund

So, for a fair understanding between regular vs direct Mutual Funds, here’s a comparative article that would guide you in choosing the right plan, as per your investment needs.

Regular Vs Direct : Know the Difference

The regular plans and direct plans are not two different schemes, but in fact, they are variants of the same principal scheme offered by AMCs. Both the plans- direct and regular, prominently differs in some parameters that are:

a. Distribution

An investor can buy a mutual fund with a regular plan through various routes like brokers, RTAs such as CAMS, Karvy, third-party securities Market intermediaries, directly through the AMC as well as through various representative offices of the fund house. While, direct plans can be bought through limited platforms - a very few third-party securities intermediaries, RTAs such as CAMS/Karvy, and authorized local representatives of the fund house. But, since many prefer to consider buying Mutual Fund Online, both direct and regular plans are available via the online mode as well as the physical/paper-based mode.

b. Expense Ratio

One of the main reasons why direct plans look attractive is due to its lower expense ratio. Mutual funds with regular plans have higher expense ratios compared to direct plans. The lower expense ratio results from the fact that direct plans don’t incur any agent commissions or distributor fees that are payable to brokers or distribution agents of the regular mutual fund schemes. Due to which, the potential returns offered by the direct mutual fund schemes are higher than that of mutual funds with regular plans. The lower expense ratio of direct plans is gaining attraction of the investors, especially amongst new investors.

c. NAV

In mutual fund investment, the value of the investment is expressed as the fund’s Asset Under Management (AUM). As direct mutual plans have a lower expense ratio, the saving in commissions is added to the return of the scheme in for of a higher NAV (Net Asset Value) each day.

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Therefore, the NAV of a direct plan is relatively higher as compared to regular plans.

Parameters Regular Plans Direct Plans
Convenience More Less
NAV Lower Higher
Expense ratio Higher (commission to the intermediary) Lower
Returns Less as the AMC fee is more More as the expense ratio is lesser

Best Direct Mutual Fund Plans

Investors who want to invest in mutual funds with direct plans, here are some of the best performing direct mutual funds as per highest AUM.

FundNAVNet Assets (Cr)3 MO (%)6 MO (%)1 YR (%)3 YR (%)5 YR (%)2024 (%)
Franklin India Opportunities Fund - Direct Growth ₹279.406
↓ -1.64
₹7,3763.719.60.730.229.439.2
Franklin Build India Fund - Direct Growth ₹158.523
↓ -0.53
₹2,950-0.517.4-4.228.531.729.1
Franklin India Smaller Companies Fund - Direct Growth ₹187.646
↓ -0.13
₹13,825-2.916.1-9.423.729.124.2
Franklin India Prima Fund - Direct Growth ₹3,021.07
↓ -8.57
₹12,540-0.315.9-1.82324.132.9
Franklin India Technology Fund - Direct Growth ₹563.539
↓ -6.27
₹1,88837.3-5.82221.229.8
DSP Micro Cap Fund - Direct Growth ₹213.749
↓ -0.32
₹17,0051.222.7-1.921.427.526.7
Franklin India Feeder - Franklin U S Opportunities Fund - Direct Growth ₹89.8873
↑ 0.71
₹4,22311.68.918.821.412.328.4
Sundaram SMILE Fund - Direct Growth ₹277.1
↓ -0.80
₹3,394-0.119.9-3.52127.620.4
Edelweiss Economic Resurgence Fund - Direct Growth ₹43.093
↓ -0.13
₹2,7680.714.3-3.219.622.627.4
Franklin India Taxshield - Direct Growth ₹1,606.77
↓ -3.61
₹6,706-1.711.8-3.119.523.123.4
Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 28 Aug 25

Research Highlights & Commentary of 10 Funds showcased

CommentaryFranklin India Opportunities Fund - DirectFranklin Build India Fund - DirectFranklin India Smaller Companies Fund - DirectFranklin India Prima Fund - DirectFranklin India Technology Fund - DirectDSP Micro Cap Fund - DirectFranklin India Feeder - Franklin U S Opportunities Fund - DirectSundaram SMILE Fund - DirectEdelweiss Economic Resurgence Fund - DirectFranklin India Taxshield - Direct
Point 1Upper mid AUM (₹7,376 Cr).Bottom quartile AUM (₹2,950 Cr).Top quartile AUM (₹13,825 Cr).Upper mid AUM (₹12,540 Cr).Bottom quartile AUM (₹1,888 Cr).Highest AUM (₹17,005 Cr).Lower mid AUM (₹4,223 Cr).Lower mid AUM (₹3,394 Cr).Bottom quartile AUM (₹2,768 Cr).Upper mid AUM (₹6,706 Cr).
Point 2Oldest track record among peers (12 yrs).Established history (12+ yrs).Established history (12+ yrs).Established history (12+ yrs).Established history (12+ yrs).Established history (12+ yrs).Established history (12+ yrs).Established history (12+ yrs).Established history (10+ yrs).Established history (12+ yrs).
Point 3Not Rated.Not Rated.Not Rated.Not Rated.Not Rated.Not Rated.Not Rated.Not Rated.Not Rated.Not Rated.
Point 4Risk profile: Moderately High.Risk profile: High.Risk profile: Moderately High.Risk profile: Moderately High.Risk profile: High.Risk profile: Moderately High.Risk profile: High.Risk profile: Moderately High.Risk profile: High.Risk profile: Moderately High.
Point 55Y return: 29.41% (top quartile).5Y return: 31.71% (top quartile).5Y return: 29.12% (upper mid).5Y return: 24.10% (lower mid).5Y return: 21.16% (bottom quartile).5Y return: 27.54% (upper mid).5Y return: 12.31% (bottom quartile).5Y return: 27.60% (upper mid).5Y return: 22.59% (bottom quartile).5Y return: 23.09% (lower mid).
Point 63Y return: 30.24% (top quartile).3Y return: 28.48% (top quartile).3Y return: 23.66% (upper mid).3Y return: 22.97% (upper mid).3Y return: 22.04% (upper mid).3Y return: 21.42% (lower mid).3Y return: 21.42% (lower mid).3Y return: 21.05% (bottom quartile).3Y return: 19.65% (bottom quartile).3Y return: 19.55% (bottom quartile).
Point 71Y return: 0.70% (top quartile).1Y return: -4.24% (bottom quartile).1Y return: -9.41% (bottom quartile).1Y return: -1.84% (upper mid).1Y return: -5.83% (bottom quartile).1Y return: -1.86% (upper mid).1Y return: 18.76% (top quartile).1Y return: -3.48% (lower mid).1Y return: -3.17% (lower mid).1Y return: -3.07% (upper mid).
Point 8Alpha: 3.08 (upper mid).Alpha: 0.00 (lower mid).Alpha: -4.68 (bottom quartile).Alpha: 2.37 (upper mid).Alpha: 3.44 (top quartile).Alpha: 0.00 (bottom quartile).Alpha: -6.49 (bottom quartile).Alpha: 4.24 (top quartile).Alpha: 0.80 (lower mid).Alpha: 0.94 (upper mid).
Point 9Sharpe: -0.22 (upper mid).Sharpe: -0.45 (bottom quartile).Sharpe: -0.55 (bottom quartile).Sharpe: -0.20 (upper mid).Sharpe: -0.50 (bottom quartile).Sharpe: -0.03 (top quartile).Sharpe: 0.72 (top quartile).Sharpe: -0.11 (upper mid).Sharpe: -0.39 (lower mid).Sharpe: -0.37 (lower mid).
Point 10Information ratio: 2.01 (top quartile).Information ratio: 0.00 (lower mid).Information ratio: 0.10 (upper mid).Information ratio: 0.08 (lower mid).Information ratio: 1.40 (upper mid).Information ratio: 0.00 (bottom quartile).Information ratio: -1.39 (bottom quartile).Information ratio: -0.29 (bottom quartile).Information ratio: 1.07 (upper mid).Information ratio: 1.58 (top quartile).

Franklin India Opportunities Fund - Direct

  • Upper mid AUM (₹7,376 Cr).
  • Oldest track record among peers (12 yrs).
  • Not Rated.
  • Risk profile: Moderately High.
  • 5Y return: 29.41% (top quartile).
  • 3Y return: 30.24% (top quartile).
  • 1Y return: 0.70% (top quartile).
  • Alpha: 3.08 (upper mid).
  • Sharpe: -0.22 (upper mid).
  • Information ratio: 2.01 (top quartile).

Franklin Build India Fund - Direct

  • Bottom quartile AUM (₹2,950 Cr).
  • Established history (12+ yrs).
  • Not Rated.
  • Risk profile: High.
  • 5Y return: 31.71% (top quartile).
  • 3Y return: 28.48% (top quartile).
  • 1Y return: -4.24% (bottom quartile).
  • Alpha: 0.00 (lower mid).
  • Sharpe: -0.45 (bottom quartile).
  • Information ratio: 0.00 (lower mid).

Franklin India Smaller Companies Fund - Direct

  • Top quartile AUM (₹13,825 Cr).
  • Established history (12+ yrs).
  • Not Rated.
  • Risk profile: Moderately High.
  • 5Y return: 29.12% (upper mid).
  • 3Y return: 23.66% (upper mid).
  • 1Y return: -9.41% (bottom quartile).
  • Alpha: -4.68 (bottom quartile).
  • Sharpe: -0.55 (bottom quartile).
  • Information ratio: 0.10 (upper mid).

Franklin India Prima Fund - Direct

  • Upper mid AUM (₹12,540 Cr).
  • Established history (12+ yrs).
  • Not Rated.
  • Risk profile: Moderately High.
  • 5Y return: 24.10% (lower mid).
  • 3Y return: 22.97% (upper mid).
  • 1Y return: -1.84% (upper mid).
  • Alpha: 2.37 (upper mid).
  • Sharpe: -0.20 (upper mid).
  • Information ratio: 0.08 (lower mid).

Franklin India Technology Fund - Direct

  • Bottom quartile AUM (₹1,888 Cr).
  • Established history (12+ yrs).
  • Not Rated.
  • Risk profile: High.
  • 5Y return: 21.16% (bottom quartile).
  • 3Y return: 22.04% (upper mid).
  • 1Y return: -5.83% (bottom quartile).
  • Alpha: 3.44 (top quartile).
  • Sharpe: -0.50 (bottom quartile).
  • Information ratio: 1.40 (upper mid).

DSP Micro Cap Fund - Direct

  • Highest AUM (₹17,005 Cr).
  • Established history (12+ yrs).
  • Not Rated.
  • Risk profile: Moderately High.
  • 5Y return: 27.54% (upper mid).
  • 3Y return: 21.42% (lower mid).
  • 1Y return: -1.86% (upper mid).
  • Alpha: 0.00 (bottom quartile).
  • Sharpe: -0.03 (top quartile).
  • Information ratio: 0.00 (bottom quartile).

Franklin India Feeder - Franklin U S Opportunities Fund - Direct

  • Lower mid AUM (₹4,223 Cr).
  • Established history (12+ yrs).
  • Not Rated.
  • Risk profile: High.
  • 5Y return: 12.31% (bottom quartile).
  • 3Y return: 21.42% (lower mid).
  • 1Y return: 18.76% (top quartile).
  • Alpha: -6.49 (bottom quartile).
  • Sharpe: 0.72 (top quartile).
  • Information ratio: -1.39 (bottom quartile).

Sundaram SMILE Fund - Direct

  • Lower mid AUM (₹3,394 Cr).
  • Established history (12+ yrs).
  • Not Rated.
  • Risk profile: Moderately High.
  • 5Y return: 27.60% (upper mid).
  • 3Y return: 21.05% (bottom quartile).
  • 1Y return: -3.48% (lower mid).
  • Alpha: 4.24 (top quartile).
  • Sharpe: -0.11 (upper mid).
  • Information ratio: -0.29 (bottom quartile).

Edelweiss Economic Resurgence Fund - Direct

  • Bottom quartile AUM (₹2,768 Cr).
  • Established history (10+ yrs).
  • Not Rated.
  • Risk profile: High.
  • 5Y return: 22.59% (bottom quartile).
  • 3Y return: 19.65% (bottom quartile).
  • 1Y return: -3.17% (lower mid).
  • Alpha: 0.80 (lower mid).
  • Sharpe: -0.39 (lower mid).
  • Information ratio: 1.07 (upper mid).

Franklin India Taxshield - Direct

  • Upper mid AUM (₹6,706 Cr).
  • Established history (12+ yrs).
  • Not Rated.
  • Risk profile: Moderately High.
  • 5Y return: 23.09% (lower mid).
  • 3Y return: 19.55% (bottom quartile).
  • 1Y return: -3.07% (upper mid).
  • Alpha: 0.94 (upper mid).
  • Sharpe: -0.37 (lower mid).
  • Information ratio: 1.58 (top quartile).

Best Regular Mutual Fund Plans

Investors who want to invest in mutual funds with regular plans, here are some of the best performing regular plans to invest in.

FundNAVNet Assets (Cr)3 MO (%)6 MO (%)1 YR (%)3 YR (%)5 YR (%)2024 (%)
DSP World Gold Fund Growth ₹35.8122
↑ 0.07
₹1,21221.75466.13710.515.9
SBI PSU Fund Growth ₹30.3096
↓ 0.00
₹5,278-5.114.4-11.228.928.123.5
Franklin India Opportunities Fund Growth ₹252.922
↓ -1.50
₹7,3763.418.8-0.628.828.237.3
Invesco India PSU Equity Fund Growth ₹59.73
↓ -0.11
₹1,391-7.421-11.528.226.125.6
Motilal Oswal Midcap 30 Fund  Growth ₹101.99
↓ -0.51
₹33,6091.9150.128.132.257.1
ICICI Prudential Infrastructure Fund Growth ₹189.27
↓ -0.79
₹7,941-2.215.7-3283327.4
HDFC Infrastructure Fund Growth ₹46.343
↓ -0.12
₹2,540-2.317-5.827.430.723
Nippon India Power and Infra Fund Growth ₹333.326
↓ -0.67
₹7,377-3.517.3-9.627.228.626.9
Franklin Build India Fund Growth ₹137.689
↓ -0.46
₹2,950-0.716.8-5.227.130.427.8
Invesco India Mid Cap Fund Growth ₹176.44
↓ -1.68
₹7,802524.98.526.926.943.1
Note: Returns up to 1 year are on absolute basis & more than 1 year are on CAGR basis. as on 28 Aug 25

Research Highlights & Commentary of 10 Funds showcased

CommentaryDSP World Gold FundSBI PSU FundFranklin India Opportunities FundInvesco India PSU Equity FundMotilal Oswal Midcap 30 Fund ICICI Prudential Infrastructure FundHDFC Infrastructure FundNippon India Power and Infra FundFranklin Build India FundInvesco India Mid Cap Fund
Point 1Bottom quartile AUM (₹1,212 Cr).Lower mid AUM (₹5,278 Cr).Upper mid AUM (₹7,376 Cr).Bottom quartile AUM (₹1,391 Cr).Highest AUM (₹33,609 Cr).Top quartile AUM (₹7,941 Cr).Bottom quartile AUM (₹2,540 Cr).Upper mid AUM (₹7,377 Cr).Lower mid AUM (₹2,950 Cr).Upper mid AUM (₹7,802 Cr).
Point 2Established history (17+ yrs).Established history (15+ yrs).Oldest track record among peers (25 yrs).Established history (15+ yrs).Established history (11+ yrs).Established history (20+ yrs).Established history (17+ yrs).Established history (21+ yrs).Established history (15+ yrs).Established history (18+ yrs).
Point 3Rating: 3★ (upper mid).Rating: 2★ (bottom quartile).Rating: 3★ (upper mid).Rating: 3★ (upper mid).Rating: 3★ (lower mid).Rating: 3★ (lower mid).Rating: 3★ (bottom quartile).Rating: 4★ (top quartile).Top rated.Rating: 2★ (bottom quartile).
Point 4Risk profile: High.Risk profile: High.Risk profile: Moderately High.Risk profile: High.Risk profile: Moderately High.Risk profile: High.Risk profile: High.Risk profile: High.Risk profile: High.Risk profile: Moderately High.
Point 55Y return: 10.53% (bottom quartile).5Y return: 28.09% (lower mid).5Y return: 28.20% (lower mid).5Y return: 26.12% (bottom quartile).5Y return: 32.15% (top quartile).5Y return: 33.02% (top quartile).5Y return: 30.69% (upper mid).5Y return: 28.64% (upper mid).5Y return: 30.36% (upper mid).5Y return: 26.90% (bottom quartile).
Point 63Y return: 36.97% (top quartile).3Y return: 28.88% (top quartile).3Y return: 28.82% (upper mid).3Y return: 28.21% (upper mid).3Y return: 28.09% (upper mid).3Y return: 28.04% (lower mid).3Y return: 27.37% (lower mid).3Y return: 27.21% (bottom quartile).3Y return: 27.14% (bottom quartile).3Y return: 26.92% (bottom quartile).
Point 71Y return: 66.12% (top quartile).1Y return: -11.19% (bottom quartile).1Y return: -0.57% (upper mid).1Y return: -11.47% (bottom quartile).1Y return: 0.15% (upper mid).1Y return: -3.01% (upper mid).1Y return: -5.80% (lower mid).1Y return: -9.55% (bottom quartile).1Y return: -5.24% (lower mid).1Y return: 8.53% (top quartile).
Point 8Alpha: 2.80 (upper mid).Alpha: 0.19 (upper mid).Alpha: 1.79 (upper mid).Alpha: 5.70 (top quartile).Alpha: 3.70 (top quartile).Alpha: 0.00 (lower mid).Alpha: 0.00 (lower mid).Alpha: -4.86 (bottom quartile).Alpha: 0.00 (bottom quartile).Alpha: 0.00 (bottom quartile).
Point 9Sharpe: 1.56 (top quartile).Sharpe: -0.78 (bottom quartile).Sharpe: -0.30 (upper mid).Sharpe: -0.57 (bottom quartile).Sharpe: -0.11 (upper mid).Sharpe: -0.42 (upper mid).Sharpe: -0.56 (lower mid).Sharpe: -0.65 (bottom quartile).Sharpe: -0.51 (lower mid).Sharpe: 0.32 (top quartile).
Point 10Information ratio: -0.56 (bottom quartile).Information ratio: -0.27 (bottom quartile).Information ratio: 1.83 (top quartile).Information ratio: -0.30 (bottom quartile).Information ratio: 0.44 (upper mid).Information ratio: 0.00 (upper mid).Information ratio: 0.00 (upper mid).Information ratio: 1.02 (top quartile).Information ratio: 0.00 (lower mid).Information ratio: 0.00 (lower mid).

DSP World Gold Fund

  • Bottom quartile AUM (₹1,212 Cr).
  • Established history (17+ yrs).
  • Rating: 3★ (upper mid).
  • Risk profile: High.
  • 5Y return: 10.53% (bottom quartile).
  • 3Y return: 36.97% (top quartile).
  • 1Y return: 66.12% (top quartile).
  • Alpha: 2.80 (upper mid).
  • Sharpe: 1.56 (top quartile).
  • Information ratio: -0.56 (bottom quartile).

SBI PSU Fund

  • Lower mid AUM (₹5,278 Cr).
  • Established history (15+ yrs).
  • Rating: 2★ (bottom quartile).
  • Risk profile: High.
  • 5Y return: 28.09% (lower mid).
  • 3Y return: 28.88% (top quartile).
  • 1Y return: -11.19% (bottom quartile).
  • Alpha: 0.19 (upper mid).
  • Sharpe: -0.78 (bottom quartile).
  • Information ratio: -0.27 (bottom quartile).

Franklin India Opportunities Fund

  • Upper mid AUM (₹7,376 Cr).
  • Oldest track record among peers (25 yrs).
  • Rating: 3★ (upper mid).
  • Risk profile: Moderately High.
  • 5Y return: 28.20% (lower mid).
  • 3Y return: 28.82% (upper mid).
  • 1Y return: -0.57% (upper mid).
  • Alpha: 1.79 (upper mid).
  • Sharpe: -0.30 (upper mid).
  • Information ratio: 1.83 (top quartile).

Invesco India PSU Equity Fund

  • Bottom quartile AUM (₹1,391 Cr).
  • Established history (15+ yrs).
  • Rating: 3★ (upper mid).
  • Risk profile: High.
  • 5Y return: 26.12% (bottom quartile).
  • 3Y return: 28.21% (upper mid).
  • 1Y return: -11.47% (bottom quartile).
  • Alpha: 5.70 (top quartile).
  • Sharpe: -0.57 (bottom quartile).
  • Information ratio: -0.30 (bottom quartile).

Motilal Oswal Midcap 30 Fund 

  • Highest AUM (₹33,609 Cr).
  • Established history (11+ yrs).
  • Rating: 3★ (lower mid).
  • Risk profile: Moderately High.
  • 5Y return: 32.15% (top quartile).
  • 3Y return: 28.09% (upper mid).
  • 1Y return: 0.15% (upper mid).
  • Alpha: 3.70 (top quartile).
  • Sharpe: -0.11 (upper mid).
  • Information ratio: 0.44 (upper mid).

ICICI Prudential Infrastructure Fund

  • Top quartile AUM (₹7,941 Cr).
  • Established history (20+ yrs).
  • Rating: 3★ (lower mid).
  • Risk profile: High.
  • 5Y return: 33.02% (top quartile).
  • 3Y return: 28.04% (lower mid).
  • 1Y return: -3.01% (upper mid).
  • Alpha: 0.00 (lower mid).
  • Sharpe: -0.42 (upper mid).
  • Information ratio: 0.00 (upper mid).

HDFC Infrastructure Fund

  • Bottom quartile AUM (₹2,540 Cr).
  • Established history (17+ yrs).
  • Rating: 3★ (bottom quartile).
  • Risk profile: High.
  • 5Y return: 30.69% (upper mid).
  • 3Y return: 27.37% (lower mid).
  • 1Y return: -5.80% (lower mid).
  • Alpha: 0.00 (lower mid).
  • Sharpe: -0.56 (lower mid).
  • Information ratio: 0.00 (upper mid).

Nippon India Power and Infra Fund

  • Upper mid AUM (₹7,377 Cr).
  • Established history (21+ yrs).
  • Rating: 4★ (top quartile).
  • Risk profile: High.
  • 5Y return: 28.64% (upper mid).
  • 3Y return: 27.21% (bottom quartile).
  • 1Y return: -9.55% (bottom quartile).
  • Alpha: -4.86 (bottom quartile).
  • Sharpe: -0.65 (bottom quartile).
  • Information ratio: 1.02 (top quartile).

Franklin Build India Fund

  • Lower mid AUM (₹2,950 Cr).
  • Established history (15+ yrs).
  • Top rated.
  • Risk profile: High.
  • 5Y return: 30.36% (upper mid).
  • 3Y return: 27.14% (bottom quartile).
  • 1Y return: -5.24% (lower mid).
  • Alpha: 0.00 (bottom quartile).
  • Sharpe: -0.51 (lower mid).
  • Information ratio: 0.00 (lower mid).

Invesco India Mid Cap Fund

  • Upper mid AUM (₹7,802 Cr).
  • Established history (18+ yrs).
  • Rating: 2★ (bottom quartile).
  • Risk profile: Moderately High.
  • 5Y return: 26.90% (bottom quartile).
  • 3Y return: 26.92% (bottom quartile).
  • 1Y return: 8.53% (top quartile).
  • Alpha: 0.00 (bottom quartile).
  • Sharpe: 0.32 (top quartile).
  • Information ratio: 0.00 (lower mid).

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