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  • News From Press Regular Vs Direct Mutual Fund: Which MF plan should you choose?

    Regular Vs Direct Mutual Fund: Which MF plan should you choose?

    Source: Financial Express May 22, 2019

    If you are new to mutual funds or don’t have the time to dig deep, it is quite natural that you would be utterly confused while choosing the right mutual fund plan that matches your financial goals. The market is flooded with numerous mutual fund plans which have a diverse range of categories and sub-categories that cater to different asset classes, investment styles, themes, risk profile, etc. This makes it especially tough to zero in on the right plan. The role of a financial advisor who sometimes also is a mutual fund distributor is to help his/her clients make the right financial decision. Of course this advice is not for free. The fee of a financial advisor comes from mutual fund asset management companies (AMC) in the form of upfront and trail commission. Asset management companies pass on these costs to their customers in the form of expenses that reduce the net asset value (NAV) of the underlying plan. That is the primary reason that buying a mutual fund directly from the AMC is cheaper then opting for a direct plan through a financial advisor/mutual fund distributor.

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    3 Comments
    Prashant · 5 years ago `
    Absolute lie because we are never biased on any fund. How can SEBI allow these people to write articles to malign an official and legal profession and how can they take away our fundamental right of dignity? These so called experts have and are ruining the country by their biased thoughts against us. They are biased not us. They have not at all surveyed or studied anything and are just writing these biased article against us.

    Shame shame shame
    Gaurav Singh · 5 years ago `
    Very well written, But I think while writing the article , he missed to analyse industry Data. Like:

    1. Out of total SIP registered in direct, how many of them closed with 1 year, 2 year and 3 year.

    2. This article is just like go to chemist and buy medicine as complete thing about medicine is written on its cover rather than consulting a doctor. you will save fees. (Smart people could understand what to opt). hope a bit of clarity was missing on this point.

    3. Cases like IILFS happened in that scenario, what step need to be taken. Does any AMC got his neck out and said this much amount is going to impact further .So, you should redeem and invest in schemes who are not having these paper.

    4. Why people who offer advisory services and charge fees are not included in article. These advisors allow client to invest in Direct options also.

    5. Why analysis of schemes which were ranked top10 by Online portals? what are there performance after 3 years 5 years? Are they still meeting there objectives.

    6. MF scheme performance depends upon fund manager a lot. If fund manager switches from 1 AMC to another. and there is change in investment style of New fund Manager. Does any online article or portal inform client what will be impact of it on his investment.

    So on... it huge list of points which you ingnored

    So, its good to write an article , but make sure its take care of all parameters not only cost. which miss guide the readers.

    AMFFA · 5 years ago `
    The difference between regular & direct reduces to 55 to 70 bps only. Is it justifiable to put investor in risky condition at the sake of this much difference ? Direct plans does support to AMC only, not investor. AMC s are failed to justify the TER charges. Now few AMC are increasing TER, without proper justification.
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