-
-
-
Services
-
-
-
More
-
POSTED BY ON February 4, 2014 9:27 pm COMMENTS (9)
I want 2 invest 3000 pm on equity sip for a long horizon say 10 years..
which one to opt for? and how to start a SIP from myself as I dont want to pay the commission …..
2021 © Jagoinvestor.com All Right Reserved
Just to understand the difference between Regular and Direct follow below link from Value Research Online
http://www.valueresearchonline.com/funds/newsnapshot.asp?schemecode=16327
Below the Fund name you will see 2 Links, Regular | Direct Plan
Click on these one by one and the difference in 1 Years Return. You can see a difference of upto 1% in the returns. In a long term of 10-20 years this one percent makes a huge difference.
Just for an example. If you invest Rs 1 Lakh per annum for 20 Years and the annualized returns from Regular Funds are 12% and from Direct it is 13% than the absolute difference between the returns would be
9146992 – 80,69,874 = Approx 10.7 Lakh which is a huge amount.
So my advice, do a little research, talk to experts, see the funds past performance at
http://www.valueresearchonline.com/funds/default.asp for 1,3,5,10 years and finalize the funds you want to Buy and than go for
“DIRECT” funds.
A little pain of doing research yourself and visiting the Fund House Office to buy the MF will save huge money for you in long term.
Happy Investing.
There are 2 Types of Broker in the market.
1. Online Brokers like ICIC Direct, Religare, India Infoline which provides the Demat account facility and also you can purchase MF from these accounts. These brokerage house charges some percentage of yoru investment as upfront charges. e.g. in case of SIP ICICI charges maximum of Rs 30 or 1.5% for your investment.
2. Offline Brokers. These will invest your money filling the MF Forms and depositing it directly to the Fund House. Fund house will get thier ARN code and your money will be invested in the “Regular” types of Fund.
If you buy the same fund yourself you wont get any commission back but the teh ARN code in the MF form will be empty and the fund type you will buy will be of “Direct” which will have lower expense ration and the returns you will get will be little higher than “Regular” type funds.
Dear Anurodh
Buy Direct Funds. It will give you better return than the one you buy from Brokers. If you search you can see 2 types of Funds 1. Regular and 2. Direct
Follow these steps
1. Identify the Funds you want to invest. Take expert advice.
2. Search for the branch office of those funds house in your city and in your locality. Just Google for the Company Name + “Mutual Fund” e.g. “ICICI Mutual Fund” and you will get the company MF portal.
3. Find out the timings, visit the branch with copy and original of your PAN Card, Address Proof, KYC Form (Fund House will also have this form), Passport size photograph, Check Book etc.
4. It will take just 1-1.5 hrs to complete all the formalities and you are done.
vaidup what is the process in this case. If I do not take services of a mutual fund distributor will the fund house pass me commissions that would have otherwise gone to distributor?
Divya, pls see the thread below for your answer. When you invest directly, you do not get any commission, instead you get a higher NAV for your fund which gives you a long term benefit rather than one time commission. So your final returns are always higher than if you would have gone through a distributor.
While investing directly, If you feel the fund house will pass you the commission for going without the distributor please do so. Else better to take services as arjunp3000 says
Hi Anurodh,
Investing in Mutual Funds directly with the AMC will give you a lower expense ratio. However, as a first time investor, investing through a Distributor can be highly beneficial for you. You will get FREE Financial advisory services, portfolio rebalancing, customer support, document pick up and drop service, Online investment tools, etc.
Investing through a Distributor also has the added advantage of investing from home. The distributor will do all the running around and make sure you get your paperwork in order. For first time investors, the distributor will also ensure that you are KYC compliant.
As Vaudup mentioned, Birla Sunlife Frontline Equity, IDFC Premiem Equity, Franklin Templeton Blue Chip Equity funds are good funds to start with. You can see the performance of each fund at Value Research or look at the top performing funds here – http://www.fundsindia.com/select-funds
Reg,
Arjun
FundsIndia.com
Hi Anurodh
You can start a SIP with any mutual fund house and while filling form please make sure there in no ARN (distributor) code written on the form. Instead you need to write ‘Direct’ in that column confirming that you are doing this investment without any distributor. Then no commission is paid to anyone.
You can start SIP in any good equity fund such as Birla Sunlife Frontline Equity, IDFC Premiem Equity, Franklin Templeton Blue Chip Equity fund etc. Do a little bit of research at http://www.valueresearchonline.com before selecting a fund.
thanks everyone for their valuable suggestion…it means a lot 2 me…