Finance glossary

What is Direct vs regular plan?

Two versions of the same mutual fund: a direct plan is bought straight from the fund house; a regular plan through a distributor who earns commission.

Both plans hold the same investments, but the direct plan has a lower expense ratio because no distributor commission is paid. Over many years, the direct plan’s returns are noticeably higher. A regular plan may still suit investors who value their distributor’s guidance.

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