Should i go with Direct plan Mutual fund being first time investor?

POSTED BY ON February 2, 2014 5:22 pm COMMENTS (8)

Hello Sir,

I am new to Mutual fund and equity investment .I have not invested anywhere yet.I am thinking to invest in following small-midcap fund for long term(10yrs) via SIP(Rs. 500).

1) HDFC MidCap Opp.- Direct (G)

2)SBI Magnum Midcap Fund (G)

I am thinking on that looking their last 5 yrs performance (regular mode).

My Questions:

1) Should i go with Direct mode of above funds as i have very basic ideas of MF?

2) Please give some suggestions on above selected funds.

3) can i fill form online and get folio number online instead visiting their location ?

4) Is there any other difference between Direct and regular except reduced expense ratio?

Any additional advice from your experience will be always accepted :)



8 replies on this article “Should i go with Direct plan Mutual fund being first time investor?”

  1. says:

    Thank you friends for suggestions….:)

  2. arjunp3000 says:

    Hi Ritesh,

    Investing 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.
    As a first time investor it is important that you plan your investments correctly. First you will need to understand your goals and then decide which funds are capable of making you reach your goals. Distributors offer free financial advice which can help you plan your investments and structure your portfolio.

    As a first time investor you will also need to get yourself KYC compliant. Here again Distributors will ensure that they visit you at your house / office and collect all your required documents and get your KYC compliant and ready for investing.

    As a distributor works with more than one fund house it is most likely that you will get prudent & unbiased financial advice when it comes to selecting funds.
    Also, you get the added benefit of consolidating all your investments in one place so keeping track of them becomes easy.

    There are more benefits of investing using a distributor. You can read about the comparison between FundsIndia and direct investing here –


  3. hemanthchandra62 says:

    The expense ratio is the only difference between Direct, Regular.

    As you said, your time line is 10 years, there will be considerable amount of difference between the returns from Direct, Regular. So better go with Direct.

    If you want to go with Direct, you must go to the AMC or KARVY/CAMS to invest for the first time. Since, this is only one time activity, I suggest you go and register for the first time with AMC.

    For more info on direct plan of mutual funds, read the below article by Manish

  4. says:

    Dear Friends,
    Thanks for reply .
    Actually i am selecting small-mid cap because of ability to return more.
    Can you give me some suggestion on mentioned MFs in question? Will it make difference if i invest in direct mode other than expense ratio ?

    Thanks ,

  5. Viren Phansalkar says:

    Hello Ritesh,
    Since this is your first investment, I assume your KYC for MF is not done.
    For all online MF purchase, you would need KYC…
    You can visit nearest CAMS center.
    Ashal has another easy alternative, visit any bank or MF agent and purchase a MF of nominal 2000 rupees. They will do your KYC. Now, you are free to do online purchase of any MF directly(since you are already KYC)…
    Moreover, if you are opting for quantum, call their helpline and they do send their person for document collection (for your KYC).

    1. says:

      Hello Viren,

      Thanks for reply.
      Do we need to have only on Folio number for all MF houses? I thought we need to have different folio Number for different AMCs. If it’s same for all then i can buy online any one and then i am set for all other AMCs.

      1. Viren Phansalkar says:

        Hello Ritesh,

        I guess, you got confused between folio number and KYC.

        KYC is common for all AMCs. It is same as that of bank KYC. You have to give Proof of address and proof of identity. Once you KYC is registered, you can login into any MF online portal and purchase. Each MF house will give unique folio number correspoding to your purchase.

  6. ashalanshu says:

    Dear Ritesh, as you are just starting, please opt a conservative fund for your 1000 Rs. mly investment. You should invest either in Franklin India Bluechip fund or Quantum Long Term Eq. fund.

    In case of quantum, you can do all the work online.



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