Regular v/s Direct Mutual Funds and what you should choose 💁‍♀️

FinTips
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Are you just getting started with investing in mutual funds? Have Direct and Regular Mutual Funds got you confused? We’re here to help you decipher them.

A Regular Fund is what you buy through a distributor whereas a Direct Fund is directly bought through a Mutual Fund house. Most banks offer you a regular Mutual Fund at up to 1% commission per annum. The mutual fund company pays a commission to the third party which is later recovered as an expense from the mutual fund. In other words, the expense ratio of a regular fund is higher compared to a direct fund.

Benefits of Direct Mutual Funds

With direct mutual funds, you

  • Don’t have to depend on a third party to make investments
  • Can invest directly online or offline
  • Don’t get charged distributor fee by the AMC leading to lower expense fee
  • Don’t have to pay transaction fees

How to pick the best Direct Mutual Fund

So how do you figure out if a direct mutual fund is the best investment? Here are a few things you should look out for:

  • Track record of good returns over a long period
  • Not affected much by market fluctuations
  • Lower expense ratio as compared to its peer funds
  • Portfolio offers diversification
  • Fund manager has an excellent track record

Difference between Direct and Regular Mutual Funds

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Invest in Direct Mutual Funds with NiyoX

The NiyoX app is a one-stop-shop for all your direct mutual fund investments with zero commission. We offer more than 12,000 mutual funds with the required fund details on our platform to assist you in building an investment portfolio of your choice. Further, we provide monthly Morningstar X-ray report with complete analysis of your portfolio for FREE!

That’s not all, you can even import your external investment portfolio into NiyoX and track them all in one place. Also if you are just getting started and want to dip your toes into investment waters, the app offers SIPs starting as low as ₹100!

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Thanks for breaking down the differences between Regular and Direct Mutual Funds, Aswathy_Nambiar! It’s essential to understand these options, especially for newcomers to mutual fund investing.Direct Mutual Funds seem like a great choice, primarily due to the absence of distributor fees and lower expense ratios. The ability to invest directly online or offline gives investors more control over their investments.For those looking to start small, the SIPs starting at ₹100 are an excellent way to begin their investment journey. If you’re interested in more financial insights, you might want to explore this financial blog. They provide valuable information and tips for investors at all levels.