The Direct Mutual Fund Dilemna

POSTED BY SK ON January 20, 2013 8:11 pm COMMENTS (4)

I had chosen to invest directly with HDFC AMC through SIP route.

From this month, I have observed in my statement that SIP in HDFC Top 200 has stopped,  and SIP in HDFC Top200-DP(direct fund) has started.

I alreday have some accumulated  corpus in HDFC Top 200

My questions are-

1. Will my accumulated holdings in HDFC Top200 suffer lower returns in future as comparedc to the direct fund?

2. If yes, then should  I transfer my existing holdings to HDFC Top200-DP? How? Through sell & buy route? Will it attract exist load on the units purchased in last one year?

3. Why my holdings in HDFC Top200 were not automatically transfered to the direct fund? (After all, these were  purchased directly from the AMC without any broker).

4 replies on this article “The Direct Mutual Fund Dilemna”

  1. TheZionView says:

    ok i thought u were referring to all..my bad 🙂

  2. TheZionView says:

    I differ in a answer given by pattu

    EXIT LOAD applies to older funds irrespective of which mode you invested earlier.
    So even if you have purchased in direct mode or distributor mode before all those bought in last 12 months with incur the exit load if redeemed now as per the exiting load policy

    1. Zionview: I was only referring to switches from regular(direct) –> direct
      to summarize:

      regular(direct) –> direct no exit load depending on AMC (true for HDFC)

      regular (distributor) –> direct exit load for holdings less than a year

      direct —> regular no exit load depending on AMC (true for HDFC)

  3. 1. Will my accumulated holdings in HDFC Top200 suffer lower returns in future as comparedc to the direct fund?

    yes if over a very long time

    2. If yes, then should I transfer my existing holdings to HDFC Top200-DP? How? Through sell & buy route? Will it attract exist load on the units purchased in last one year?

    Exit applied for holdings that are less than year old and purchased through distributor. If you had purchased directly before then there is not exit load.
    In both cases there will be short term capital gain tax for units less than a year old.
    So best would to switch units gradually as they age more than a year

    3. Why my holdings in HDFC Top200 were not automatically transfered to the direct fund? (After all, these were purchased directly from the AMC without any broker).

    You will have to do it yourself. Those are the rules! Why cannot be answered! The choice is with the investor to switch or not to switch

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