How do I switch from regular to direct mutual funds?

How do I switch from regular to direct mutual funds?

Visit the transaction page, where you can buy, change, or redeem your fund units. Select the ‘switch’ option and then click on the respective fund name. It will have a ‘Direct Plan’ option; click on it and follow the steps displayed. It will take about four working days to reflect the change.

Does compounding really work in mutual funds?

Mutual funds are designed to make the most out of the power of compounding. Investors gain when the value of fund units goes up. If you invest with a long-term horizon, then the power of compounding will be unleashed to the fullest, which helps you grow your investment.

Why is Direct Plan NAV higher?

The NAV of the scheme is reported after deducting these expenses. As there are no commissions involved, so the expense ratio of direct plans is lower than regular plans. Because of this reason, the direct plan of a mutual fund scheme would report a higher NAV after considering all the expenses.

What is the difference between direct mutual fund and regular mutual fund?

There is a substantial difference in the returns you receive when you invest in Regular Mutual Fund plans as compared to the Direct Mutual Fund plans.1-2\% of your investments are being eaten every year by your agent/broker via commissions when you invest in Regular Plans.

What is a direct fund and how does it affect you?

As such, this came to be known as Direct Funds. Direct funds are generally just a different version of the regular mutual funds. The only difference is that the traditional agent/broker is not involved. As seen above, this simple exclusion has a multi-layer impact on your NAV, return on investment, and general relationship with the AMC.

How fund managers can generate better returns?

Fund Managers can generate better returns by reducing their expense ratio. The commission when removed increases returns over the long-term. In case of direct mutual fund plan, investors are advised to do their own market research and select top-performing mutual fund schemes.

Is there any broker in a direct mutual fund?

In case of a direct mutual fund, there is no broker or intermediator. You can purchase mutual fund units directly from the mutual fund houses. There is no fee or commission paid to the broker or intermediary. What is the difference between direct and regular plan in mutual funds?