Top 10 benefits of investing in direct mutual funds
The mutual fund investments have become a new craze in the world of investors and there are so many things to learn about them. The most basic fact that you need to learn as a beginner investor is that direct plan mutual funds are a better option as compared to a regular plan mutual fund investment. This is very important to understand the basic difference between direct and regular mutual fund so that you can choose the right plan for yourself. The direct plan mutual funds are much more famous than the regular plans so here is a brief guide about them explaining all you need to know about direct plan mutual funds.
- The direct plan mutual funds can only be purchased through am AMC (Asset management company) or through a mutual fund house, they cannot be purchased through any local distributor or brokerage agencies.
- The direct plan mutual funds are the commission-free plans and they do not charge any hidden cost to the investor as their brokerage commission. This leads to the lower expense ratio as compared to the regular plan mutual funds.
- The NAV (Net Asset Value) is higher in the case of direct mutual fund plans as compared to the regular mutual fund plans which make them even more attractive for the investors who are willing to go for the long-term investments.
- It has been seen that the rate of return is higher in the case of direct mutual fund plan as compared to the regular plan due to the lower expense ratio and higher NAV. This is seen that the highest difference in the rate of returns is seen in the Equity Oriented Mutual Fund Schemes of both the plans.
- The direct plan mutual funds are free of any hidden fees or any kind of commission. You do not have to pay any extra charges like distribution fees or trial fees. Also, there is no cost deducted from your overall returns and you can enjoy the highest potential of your investments.
- The transactions are made directly to the mutual fund house or the AMC so there is no transaction charges has to be paid in case of direct plan mutual funds. This will lead you to a less paid investment which will give great returns.
- The other thing you need to understand the direct plan mutual funds is that the portfolio manager that regulates your investment can be anyone you choose. This helps in maintaining the unbiased and zero conflict advisor for your investment who will help you in getting the maximum returns without any commission and biased decisions.
- Those investors who already have a running regular mutual fund plan can also switch into the direct mutual fund plan as it is not restricted. You may have to pay the previous fees and clear all your transaction fees before switching into the direct plan but once you enter this plan there will be no further extra loads and commissions for you to pay and you can enjoy the commission-free mutual fund plan.
- There are so many different ways to learn about direct mutual fund plans as there are so many websites available on the internet who provide the details of the available direct mutual fund plans. There are many online services available for purchasing the mutual funds online through a mutual fund house or an AMC.
- The biggest benefit of having a direct mutual fund plan is that you do not have to worry about being cheated in any way or any loss as the direct plan mutual funds are the safest schemes.