How different is “Direct” option in Mutual Funds

POSTED BY Jig ON February 28, 2013 1:05 am COMMENTS (6)

I am investing in HDFC/Franklin/Quantum AMCs since last 2 yrs as direct investment to AMC.
Now from Jan 2013 i got the mail and my SIPs amount is started investing in same funds of same AMCs but written with DIRECT.

My query is how the expense ratio will be differ from my earlier investment to current invesment .
For me i have started investment only DIRECT with AMC since begining. so why i am getting different fund names ( written with DIRECT )in my STATEMENT.

Thanks
Jig

6 replies on this article “How different is “Direct” option in Mutual Funds”

  1. Dear Bharat, if the fund in question is Eq. fund, the LTCGs ‘ll be tax free.

    Thanks

    Ashal

  2. bharat shah says:

    i hope you may be aware that for taking benefit of Direct for your investments upto 31st Dece. 2012, you need to switch from normal scheme to new Direct scheme of the respective mf, which would incur expenses in form of STT and Short Term/Long term capital gain tax depending upon your fund and time of holding.

  3. Jig says:

    Thanks Ashal.

  4. Dear JIG, earlier there was no differentiation between investors investing directly or through brokers/distributors. So even though you were a direct investor, still you were paying the same Fund Management Charge (aka EXPENSE RATIO). Now from 1st Jan 2013 on wards, you as a direct investor ‘ll get the benefit of lower ER & accordingly your statement is showing the fresh investment in the fund with an added Direct.

    THANKS

    Ashal

  5. Jig says:

    Hello Ashal,
    Surprised that my query is not uploaded but heading .
    I am investing in HDFC/Franklin/Quantum AMCs since last 2 yrs as direct investment to AMC.
    Now from Jan 2013 i got the mail and my SIPs amount is started investing in same funds of same AMCs but written with DIRECT.
    My query is how the expense ratio will be differ from my earlier investment to current invesment .

    For me i have started investment only DIRECT with AMC since begining. so why i am getting different fund names ( written with DIRECT )in my STATEMENT.

    Thanks
    Jig

    Thanks

  6. Dear Jig, what’s the query?

    Thanks

    Ashal

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