8.15What is a direct mutual fund plan?
1What is it?
A direct plan is bought directly from the AMC (or via platforms offering direct plans) with no distributor commission.
2Why does it exist?
Lower expense ratio, so higher returns over time than the regular plan of the same fund.
3Quick revision
- No commission.
- Lower TER.
- Higher long-term returns.
4Knowledge check
Q1. Direct or regular: which has higher NAV growth?Show answer
Direct, due to the lower expense ratio.
Q2. Do direct plans hold different stocks?Show answer
No, same portfolio, different cost.
Q3. Who suits direct plans?Show answer
Investors confident choosing funds themselves.
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