{"id":1236,"date":"2016-05-30T11:36:45","date_gmt":"2016-05-30T06:06:45","guid":{"rendered":"http:\/\/trucompare.in\/blog\/?p=1236"},"modified":"2016-05-30T11:40:39","modified_gmt":"2016-05-30T06:10:39","slug":"mutual-fund-investing-how-direct-plans-can-enhance-your-returns","status":"publish","type":"post","link":"https:\/\/www.trucompare.in\/blog\/mutual-fund-investing-how-direct-plans-can-enhance-your-returns\/","title":{"rendered":"Mutual Fund Investing- How investing in direct plans can enhance your returns?"},"content":{"rendered":"<p>If you go to any mutual fund website- you will see the same MF listed under &#8220;Regular Plan&#8221; and &#8220;Direct Plan&#8221;. So you have a \u00a0ICICI Pru Discovery Fund- Direct Plan and ICICI Pru Discovery- Regular plan. So what exactly is the difference between the two plans and which one should you invest in?<\/p>\n<ul>\n<li>If you look at their equity portfolios, both regular plans and direct plans have essentially the same stocks.<\/li>\n<li>The only difference is between their &#8220;expense ratio&#8221; which is like a fund management fee that the mutual fund charges from its investors. This ranges from 0.5 to 3% for many equity funds.<\/li>\n<li>Direct plans are funds that you buy directly from the mutual fund \u00a0company without the intervention of any MF distributor\/agent whereas regular plans are the plans where \u00a0a part of your investments goes as &#8220;commissions&#8221; to the MF agent\/bank\/broker.<\/li>\n<li>Direct plans have lower expense ratios as compared to regular plans, thereby enhancing your returns by 0.5-1.5% in many cases. Take an example of ICICI Pru Discovery Fund that we talked about. The\u00a0expense ratio of direct plan is 0.88% whereas that of regular plan is 2.16%- a\u00a0difference of about 1.25% per annum. \u00a0As a result direct plan has a 1 year return of about 1% whereas regular plan has a 1 year return of -0.25%. This is the money going into the pocket of your agent\/advisor.<\/li>\n<li>So if you are DIY investor who knows which funds to buy, then you should definitely buy direct plans . If you are KYC compliant, you can buy directly from MF websites. If you first time investor, get yourself KYC complaint first .<\/li>\n<\/ul>\n<p>We always recommend that you hire an investment advisor and pay him separately for portfolio management rather than paying unnecessary commissions on regular MF plans. Buying regular plans\u00a0encourages MF agents to churn your portfolio more frequently as their incentive comes from extra commissions!<\/p>\n<p>If you have any questions regarding MF investments, feel free to contact us. We construct efficient portfolios based on direct MF plans and diversify using asset allocation techniques rather than buying and selling 25 different schemes in the portfolio.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>If you go to any mutual fund website- you will see the same MF listed under &#8220;Regular Plan&#8221; and &#8220;Direct Plan&#8221;. So you have a \u00a0ICICI Pru Discovery Fund- Direct Plan and ICICI Pru Discovery- Regular plan. So what exactly is the difference between the two plans and which one should you invest in? If &hellip; <a href=\"https:\/\/www.trucompare.in\/blog\/mutual-fund-investing-how-direct-plans-can-enhance-your-returns\/\" class=\"more-link\">Continue reading <span class=\"screen-reader-text\">Mutual Fund Investing- How investing in direct plans can enhance your returns?<\/span> <span class=\"meta-nav\">&rarr;<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[35],"tags":[],"class_list":["post-1236","post","type-post","status-publish","format-standard","hentry","category-investing"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"jetpack_shortlink":"https:\/\/wp.me\/p3wDt5-jW","jetpack-related-posts":[{"id":877,"url":"https:\/\/www.trucompare.in\/blog\/top-retirement-plans-for-2016\/","url_meta":{"origin":1236,"position":0},"title":"Best Retirement and Pension Plans in India","author":"Trucompare","date":"January 2, 2016","format":false,"excerpt":"Best\u00a0Pension Plans in India \u00a0Retirement is a phase to enjoy freedom from work, engage in leisurely activities, pursue hobbies, embark on travel expeditions and basically do everything that you wanted to do but couldn\u2019t because of your active working years. But, to live a king-size life during your golden days,\u2026","rel":"","context":"In &quot;Retirement&quot;","block_context":{"text":"Retirement","link":"https:\/\/www.trucompare.in\/blog\/retirement\/"},"img":{"alt_text":"Retirement_Plans","src":"https:\/\/i0.wp.com\/trucompare.in\/blog\/wp-content\/uploads\/2016\/01\/Retirement_Plans.jpg?resize=350%2C200","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/trucompare.in\/blog\/wp-content\/uploads\/2016\/01\/Retirement_Plans.jpg?resize=350%2C200 1x, https:\/\/i0.wp.com\/trucompare.in\/blog\/wp-content\/uploads\/2016\/01\/Retirement_Plans.jpg?resize=525%2C300 1.5x"},"classes":[]},{"id":958,"url":"https:\/\/www.trucompare.in\/blog\/guide-to-investing-in-elss-funds\/","url_meta":{"origin":1236,"position":1},"title":"Guide to investing in ELSS funds for tax saving","author":"Trucompare","date":"January 5, 2016","format":false,"excerpt":"ELSS Funds \u00a0What is ELSS? The indisputable purpose of an investment is to save tax and realize growth in the invested money. In the recent years tax saving has become all the more important with the tax saving ceiling under section 80C raised to 1.5 lacs from 1 lac. The\u2026","rel":"","context":"In &quot;Tax Saving&quot;","block_context":{"text":"Tax Saving","link":"https:\/\/www.trucompare.in\/blog\/tax-saving\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":641,"url":"https:\/\/www.trucompare.in\/blog\/best-term-plans-in-india\/","url_meta":{"origin":1236,"position":2},"title":"Best Term Insurance Plans in India- A quick comparison","author":"Trucompare","date":"March 26, 2015","format":false,"excerpt":"\u00a0 Best Term Insurance Plan Please see an updated version of the comparison here-\u00a0IRDA Claim Settlement Ratio for 2015 - Compare best online term insurance plans As online term plans have gained popularity, almost all the life insurance companies have come up with their online term plans and claims to\u2026","rel":"","context":"In &quot;Term Insurance&quot;","block_context":{"text":"Term Insurance","link":"https:\/\/www.trucompare.in\/blog\/term-insurance\/"},"img":{"alt_text":"TruCompare_head","src":"https:\/\/i0.wp.com\/trucompare.in\/blog\/wp-content\/uploads\/2013\/05\/TruCompare_head.png?resize=350%2C200","width":350,"height":200},"classes":[]},{"id":592,"url":"https:\/\/www.trucompare.in\/blog\/irda-claim-settlement-ratio-2014\/","url_meta":{"origin":1236,"position":3},"title":"IRDA Claim Settlement Ratio 2013-14 &#8211; Compare Term Insurance Plans","author":"Trucompare","date":"March 21, 2015","format":false,"excerpt":"Update- We have updated the claim settlement ratios of insurers for 2014-15 on our website. Compare now to view details. We have written about Max Life claim ratio for 2014-15 here. Following is the statistics for IRDA Claim Settlement Ratio 2013-14 for individual death claims by insurance companies. I have\u2026","rel":"","context":"In &quot;Term Insurance&quot;","block_context":{"text":"Term Insurance","link":"https:\/\/www.trucompare.in\/blog\/term-insurance\/"},"img":{"alt_text":"TruCompare_head","src":"https:\/\/i0.wp.com\/trucompare.in\/blog\/wp-content\/uploads\/2013\/05\/TruCompare_head.png?resize=350%2C200","width":350,"height":200},"classes":[]},{"id":293,"url":"https:\/\/www.trucompare.in\/blog\/are-endowment-plans-any-good-for-wealth-creation\/","url_meta":{"origin":1236,"position":4},"title":"Are Endowment Plans, aka Traditional Life Insurance Plans, Any Good for Wealth Creation?","author":"Trucompare","date":"May 10, 2013","format":false,"excerpt":"Since most of the life insurance policies in India are still sold as \"savings and investment\", endowment plans( also known as traditional life insurance plans) are the most popular of the products. This trend was started by LIC of India ( oldest insurer in India) whose agents goaded investors to\u2026","rel":"","context":"In &quot;Endowment Plan&quot;","block_context":{"text":"Endowment Plan","link":"https:\/\/www.trucompare.in\/blog\/endowment-plan\/"},"img":{"alt_text":"TruCompare_head","src":"https:\/\/i0.wp.com\/trucompare.in\/blog\/wp-content\/uploads\/2013\/05\/TruCompare_head.png?resize=350%2C200","width":350,"height":200},"classes":[]},{"id":62,"url":"https:\/\/www.trucompare.in\/blog\/insurance-companies-customer-satisfaction-metrics\/","url_meta":{"origin":1236,"position":5},"title":"Customer Satisfaction Data for Life Insurance Companies in India","author":"Trucompare","date":"May 5, 2013","format":false,"excerpt":"Here are some\u00a0customer satisfaction metrics that might be useful in evaluating life insurance companies in India. I have taken 2 metrics to measure the same: Customer Churn ( Percentage of policies lapsing after Year 1) Customer complaint resolution Looking at the customer complaint resolution data actually surprised me ! Complaints\u2026","rel":"","context":"In &quot;Term Insurance&quot;","block_context":{"text":"Term Insurance","link":"https:\/\/www.trucompare.in\/blog\/term-insurance\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]}],"_links":{"self":[{"href":"https:\/\/www.trucompare.in\/blog\/wp-json\/wp\/v2\/posts\/1236","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.trucompare.in\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.trucompare.in\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.trucompare.in\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.trucompare.in\/blog\/wp-json\/wp\/v2\/comments?post=1236"}],"version-history":[{"count":5,"href":"https:\/\/www.trucompare.in\/blog\/wp-json\/wp\/v2\/posts\/1236\/revisions"}],"predecessor-version":[{"id":1241,"href":"https:\/\/www.trucompare.in\/blog\/wp-json\/wp\/v2\/posts\/1236\/revisions\/1241"}],"wp:attachment":[{"href":"https:\/\/www.trucompare.in\/blog\/wp-json\/wp\/v2\/media?parent=1236"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.trucompare.in\/blog\/wp-json\/wp\/v2\/categories?post=1236"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.trucompare.in\/blog\/wp-json\/wp\/v2\/tags?post=1236"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}