Direct vs regular mutual funds: Which one is better?

There are 2 ways to invest in mutual funds – Direct and Regular plans. One of the major difference between the two is that of expense ratio. Expense ratio is the yearly maintenance charge levied by mutual funds to finance its expenses.

Investing via direct plan means that you are buying directly from the mutual fund or the asset management company, while in a regular plan you buy through an intermediary – advisor, broker, or distributor. Regular plans involve an intermediary, the AMC pays a commission to them which is recovered from investors in form of expense ratio.

Since regular plan includes bigger expense ratio along with distributor fee, should you switch over to direct plan and save on the expenses? Money9 hosted Roongta Securities’ Harshvardhan Roongta and Priyanka Sambhav in Money9 Helpline’s LIVE Q&A session.