Direct vs Regular Mutual Funds: How Lower Fees Can Boost Long-Term Returns
In our Fin Shorts category, we're breaking down the difference between Direct and Regular Mutual Funds. With new SEBI rules making the Direct plan the default from November 1st, understanding this is crucial for your long-term investment journey in the Indian stock market. Direct plans cut out distributor commissions, leading to lower expense ratios compared to Regular plans, which include these commissions. While both plans invest in the same underlying assets and are managed by the same fund manager, the difference in costs can significantly boost your returns over time. Lumic explains how a ₹5,000 SIP over 20 years could potentially yield approximately ₹6 lakhs more with direct plans. This change is a big step towards cost-effective investing for Indian retail investors.
In our Fin Shorts category, we're breaking down the difference between Direct and Regular Mutual Funds. With new SEBI rules making the Direct plan the default from November 1st, understanding this is crucial for your long-term investment journey in the Indian stock market. Direct plans cut out distributor commissions, leading to lower expense ratios compared to Regular plans, which include these commissions. While both plans invest in the same underlying assets and are managed by the same fund manager, the difference in costs can significantly boost your returns over time. Lumic explains how a ₹5,000 SIP over 20 years could potentially yield approximately ₹6 lakhs more with direct plans. This change is a big step towards cost-effective investing for Indian retail investors.
