“Direct Plan” and its implementation

POSTED BY Dominic Prakash ON January 30, 2013 9:18 am COMMENTS (8)

End of January 2013, my original 8 fund have become 15 funds because of the improper implementation of “Direct” plan.

All along the time I have been investing in “Direct” mode and I dont understand why I was not given any option to change the same to the new “Direct Plan”. So excpet my Quantum fund all other funds created a new baby fund.

I understand the lower expense ratio etc. But if someone if already in “Direct” mode why do they need to create one more?

Just wondering do you guys feel the same?

8 replies on this article ““Direct Plan” and its implementation”

  1. Dear Bunker, if you want to sell your demat holdings (MF units), you can use your existing platform offered by your broker. Please do note in case of sell of your units in exchange ‘ll invite brok. & other charges where as redemption directly with your AMc ‘ll not invite these charges.



  2. Dear Dominic, your investments after 1st Jan 2013 on wards have been moved automatically to new direct funds. Effectively you are no more investing fresh money into old funds. It’s only the old holdings are there. If you mean to say that old holdings should also be ported automatically to new Direct plans, my dear friend, due to NAV mismatch, the porting ‘ll require your consent as well as exit load as the NAV of direct plan is different & Direct plan is a class of it’s own.

    Hope I’m able to answer your properly. If you are still in doubt, please feel free to ask again.



  3. Dominic Prakash says:

    I dont have any problem except that my 8 funds grown into 15 funds on its own.

    If I do a switch then I have wait for one more year to exit that again. Hope I am clear.

    In my case my old or existing SIP’s are now going towards “Direct Plan” from Jan 1 st onwards.

    I feel that if a person is already in the “Direct” mode then he should have moved to “Direct Plan” by default instead of creating one more fund.

  4. Bunker Guide says:

    I just checked quantum amc direct plan purchase website. It asks me whether I want to purchase units “physical” or “demat”. If I give my existing NSDL demat number to them (DP ID and Client ID), the units will come in my demat.
    My question is how do we redeem those units? Will my online trading website help me in redeeming those units which were not purchased from their platform?
    Please advice.

  5. Ramesh says:

    If you are happy with the older way, you can request your respective AMCs to continue the new SIPs in the older “Direct” funds. You will get back your original 8. except maybe 1 or 2 SIPs into the newer plans. Not a big deal, man.

  6. Dear Donimic, what’s your problem? direct plans or the leg work require to invest into direct plan? Please act as answered by dear JGMM.



  7. The old ‘DIRECT’ mode would still have higher expense ratios regardless of the fact it was DIRECT! The current ones will incur lower expense ratios.

    For the old units that have completed 1 year just make a simple switch to the DIRECT MODE – this is to avoid short term capital gain tax. For others units do so every 3 months so by December 2013 all units would be switched to DIRECT plan and you wont have to worry about the dozen odd funds.

    My observation: You will still have 7 funds post consolidation which is a tad higher. Trim then down to 3-4.

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