Investors who are planning to invest in mutual funds might have heard about these terminologies. First, let me explain about investing in direct mutual funds vs regular mutual funds
Regular Mutual Funds: Here distributors(intermediaries) or advisors or agents sell a mutual fund. Here mutual fund companies pay commissions to intermediaries, hence expense ratio of regular funds is always on the higher side.
Direct Mutual Funds: Here mutual funds companies sell mutual funds directly on their websites, lately even companies like Paytm, Groww, Kuvera, and so on selling both direct and regular mutual funds on their platform.
What investors have in store for direct and regular mutual funds?
Regular mutual funds come with an advisory note, for newbie investors going with regular mutual funds makes sense especially platforms like Scripbox.
Advisors should advise very few funds into equity and debt investors do not have to go through the pain of searching good funds from more than 2500 schemes.
Direct mutual funds come with lesser expense ratio which translates to better returns than regular mutual funds, which will be quite substantial gains in the long run.
If investors want to view all his investments in one place and need a regular review of there funds and portfolio. Just you to go with regular funds with a good advisory platform.
The expense ratio being higher on regular mutual funds does not mean it’s bad rather you get additional benefits of the transaction-related benefits like skipping current month SIP, smooth handling of bank, name, and address change request.
Just avoiding regular funds to pay excess expansion ratio and buying bad directs funds without much research would be a bad decision and end up making poor returns.
Based on how well you can manage your funds decide whether you want to invest in regular or direct funds. If you have a deep understanding of how mutual funds work you can choose direct funds, else go ahead with a good advisor.