mutual fund schemes

Unlocking the benefits of investing in mutual funds through the direct mode


Investors often find themselves at a crossroads when it comes to choosing the right mode of investment in mutual funds. Between the available options, the direct mode stands out as a path less travelled, yet one that holds immense potential for those seeking to optimise their investment journey. Unlike the regular route, direct mutual funds offer a more direct and cost-effective approach to investing, providing investors with a host of advantages that can shape their financial future.

Understanding direct vs. regular route

Direct mutual funds, as the name suggests, allow retail investors to directly invest in mutual fund schemes without the intermediary assistance of a distributor or broker. This mode essentially cuts out the middleman, leading to lower expense ratios and potentially higher returns. On the other hand, the regular route involves investing through an intermediary, often a financial advisor or a distributor, who charges a commission for their services. While the regular route might seem convenient, it is important to weigh its costs against the benefits it offers.

Benefits of investing in direct mutual funds

Cost efficiency

One of the primary advantages of direct mutual funds is their cost efficiency. Since investors bypass the distributor’s commission, the expense ratio is significantly lower compared to the regular route. This means that a larger portion of the returns generated by the mutual fund remains in the investor’s pocket.

Control and customisation

Investing directly allows the investors to make their own decision. This infers higher control over asset allocation, investment portfolio construction and the potential to customise investments as per individual financial goals and preferences.

Higher returns

With lower expense ratios and no middleman commissions eating into returns, direct mutual funds have the potential to generate higher returns over the long term. Even a seemingly small difference in expenses can accumulate into substantial savings over time.

Ease of switching and portfolio tracking

Direct investors have the flexibility to switch between schemes or funds with relative ease. Additionally, tracking the performance of investments becomes more straightforward as investors can directly access relevant information from asset management companies.


Directmode investors enjoy greater transparency as they deal directly with asset management companies. This enables investors to have a clearer view of the investment process, portfolio holdings, and performance reports, allowing better-informed decision-making.

Ending note

Both direct and regular routes of investing in mutual funds have their own merits and suit different types of investors. The direct route is suitable for those who possess an understanding of financial markets and are comfortable researching and choosing schemes and are keen on enhancing their returns by lowering costs. In contrast, the regular mode may be more prudent for those who are new mutual fund investors, requiring guidance and recommendation and are willing to pay a little higher expense for expertise assistance.

As every individual’s life goals, risk appetite and investment knowledge differ, thus, the decision between regular and direct route selection for mutual fund investment must be based on careful evaluation of one’s financial circumstances and preferences. Whichever path an investor chooses, the key lies in making informed decisions that align with their long-term financial aspirations.

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