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Direct vs Regular Mutual Funds: What is good for you?

by Sonal Shukla

In recent years, there has been a growing interest in direct and regular mutual fund investments. Mutual fund investments are one of the most demanded investment options among professional investors and new investors. Mutual funds provide a diversified portfolio to the investors which is managed by professionals making them an attractive option to investors looking to grow their wealth in the long term. However, many people are confused between a regular and a direct plan and their role in the process. Do you also wonder about the same questions? Then read the complete blog to get answers to all your questions.

Direct Mutual Funds:

Direct mutual funds are those where an investor can directly invest in AMC without a broker or distributor. It makes them more cost-effective than regular mutual funds. Since no intermediaries are involved, expenses are low and investors can capitalize on higher returns on their investments.

Regular Mutual Funds:

In regular mutual funds, intermediaries like distributors or brokers exist who help investors in choosing and managing their investments. They charge fees and commissions for their services, which increases the expense ratio of the investment.

Difference Between Direct and Regular Mutual Funds:

Now that you know what direct and regular mutual funds are, you can decide which option is suitable for you. Here are some key differences between them:

1. Investment Knowledge and Experience

If you have good knowledge about stock markets and mutual funds investments and like to make your own investment decisions then direct mutual funds are a better option for you.

2. Cost

If you aim to minimize expenses and get a better return on the investment, then you can select direct mutual funds because they have a lower expense ratio as compared to regular mutual funds.

3. Regular Assistance

If you are looking for professional advice and want to take the help of an expert in managing your investments, then regular mutual funds might suit you as they offer you access to intermediaries, who can guide you in the management of your investments and their further journey.

4. Long-Term Goals

Mutual funds investment works best when you have long-term investment ambitions and targets. If you focus on the long-term and are open to researching and managing your investments, direct mutual funds may support your goals better.

Using the SIP Mutual Funds App:

The SIP mutual funds app is a great option for anyone looking for a user-friendly and reliable platform to invest in mutual funds. The Systematic Investment Plan, or SIP, is among one of the best methods for making small, recurring investments.

The Bottom Line

Both Direct and regular mutual funds have their particular attributes and merits, which are, based on investor preferences and demands. deciding to invest in direct or regular mutual funds is a personal choice of the investor. Through the SIP mutual funds app, your investment process has become more convenient and efficient.

For experienced investors direct mutual funds are a better option but If you are just starting, you better invest in a regular mutual fund, because of the security, value-added service, and convenience it brings. A good advisor will monitor and rebalance your portfolio to achieve higher returns from your investments.

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