Posted On Friday, Dec 31, 2021
|Table of Contents
What are Direct Mutual Funds
How to Pick a Good Direct Mutual Fund
What are Direct Mutual Fund Investment Platforms
Difference Between Direct & Regular Mutual Funds
The term “Direct Mutual Funds” might raise a few questions in the minds of someone who reads.
One may ask, was I investing indirectly until now?
And it isn’t completely wrong to say that if you are not investing in Direct Plan of Mutual Funds, you are basically investing your hard earned money in a “via-via” fashion.
You see, for anyone investing in mutual funds, it is extremely important to know the types of investments and ways in which one could invest.
So, just in case you are not aware, you can invest in mutual funds via two different type of plans.
Direct Plan Mutual Fund Investments & Regular Plan Mutual Fund Investments.
Today we are going to tell you about Direct Plan of Mutual Fund Investments.
What are Direct Plan Mutual Funds ?
In simple terms, direct plan mutual funds are mutual fund plan that are offered to you as an investor directly by the fund house or AMC.
So, nowhere in the entire process of investment you have to pay commission to any third party, like distributor. You as the investor, can deal directly or with the help of RIA with the AMC offering the fund.
Given the fact that no third party is involved in the transaction, you don’t have to pay any commissions to anyone.
That is a direct saving for you right there.
This lowers the expense ratio than that of regular funds.
So, if you look forward to investing with a direct plan, you should know about the options direct plan mutual funds have to offer.
A simple search on a search engine saying “Direct plan of mutual funds” will get you results that are enough to confuse you.
Direct plan mutual funds has to offer has a long list.
How do you pick what is good for you? Well, for starters, you could look at some basic characteristics in funds like:
1. Risk-adjusted returns over a long period.
2. Lower downside risk during market fluctuations
3. A low expense ratio than its contemporaries or peer funds.
4. The fund invests in a diverse selection.
5. The consistency of track record
Now that you know all this, the next logical step is to know how you can start investing in direct plan of mutual funds.
Here are a few ways you can consider -
You could choose an AMC and visit its office physically or go to their website, register, fund the fund you want to invest in or through RIA and make investment.
Having said all this, there are still investors in the market that prefer the Regular plan.
So, it is very important that you know the differences when it comes to direct plan vs regular plan of mutual fund.
|You invest physically or through the website of the AMC or a RIA
|You invest through a mutual fund distributor who acts as a third party involved in the transaction.
|Since there is no commission involved on the money you invest, which means potentially higher investment for you compare to regular plan.
|You have to pay commissions to your distributor. This reduces your investments to that extend.
|Expense ratio is relatively lower as there is no commission to be paid.
|A higher expenses ratio due to the commissions you pay to the third party involved.
So, now that you know the comparison of direct plan of mutual fund vs regular plan of mutual fund, you can say that in the long run, direct plan mutual fund investments seem to offer better returns.
But like all other things, there are some cons to this as well.
Now, we believe we have given you a good amount of information about direct plan of mutual funds.
We spoke about direct plan of mutual fund investments, comparison between direct mutual fund vs regular
Past performance may or may not be sustained in the future.
So, if you want to start investing with a direct plan of mutual fund, you can start with us right here.
The views expressed here in this article / video are for general information and reading purpose only and do not constitute any guidelines and recommendations on any course of action to be followed by the reader. Quantum AMC / Quantum Mutual Fund is not guaranteeing / offering / communicating any indicative yield on investments made in the scheme(s). The views are not meant to serve as a professional guide / investment advice / intended to be an offer or solicitation for the purchase or sale of any financial product or instrument or mutual fund units for the reader. The article has been prepared on the basis of publicly available information, internally developed data and other sources believed to be reliable. Whilst no action has been solicited based upon the information provided herein, due care has been taken to ensure that the facts are accurate and views given are fair and reasonable as on date. Readers of this article should rely on information/data arising out of their own investigations and advised to seek independent professional advice and arrive at an informed decision before making any investments.
Please visit – www.QuantumAMC.com to read scheme specific risk factors. Investors in the Scheme(s) are not being offered a guaranteed or assured rate of return and there can be no assurance that the schemes objective will be achieved and the NAV of the scheme(s) may go up and down depending upon the factors and forces affecting securities market. Investment in mutual fund units involves investment risk such as trading volumes, settlement risk, liquidity risk, default risk including possible loss of capital. Past performance of the sponsor / AMC / Mutual Fund does not indicate the future performance of the Scheme(s). Statutory Details: Quantum Mutual Fund (the Fund) has been constituted as a Trust under the Indian Trusts Act, 1882. Sponsor: Quantum Advisors Private Limited. (liability of Sponsor limited to Rs. 1,00,000/-) Trustee: Quantum Trustee Company Private Limited. Investment Manager: Quantum Asset Management Company Private Limited. The Sponsor, Trustee and Investment Manager are incorporated under the Companies Act, 1956.
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