Direct Plans Are For Savvy Investors

Queries Prarambh Kasturi, email What is the meaning of direct investing in mutual funds? Investors, typically, have two options—regular and direct—to invest in mutual funds schemes. Direct plans of a mutual fund scheme allow investors to directly invest in the scheme without taking any help of the intermediaries like advisors or distributors, whereas in the case of the regular option, an intermediary is involved. The advantage with direct mutual fund schemes is that its has lower expense ratio, compared to regular schemes. Expense ratio is higher in case of a regular scheme because distributors are paid commission out of it. Investment in direct mutual fund options can be considered by seasoned investors, as they can analyse, compare and decide on their own which scheme to invest in. However, if you need advice, take the help of an advisor or financial planner. Many...