Is it advisable to transfer the proceeds from regular plans into the direct plans. I understand regular plans continue to bleed from trail commissions. I want to remain invested for a longer duration of five years of more.
- Peeyush Aggarwal
Yes, it is a wise idea to invest the money in a direct plan of a mutual fund scheme. It will help you to earn more returns over a long period as the direct plans have a lower expense ratio. Direct plans of mutual funds were introduced in January 2013 to help investors save money on distributor commission by investing directly in mutual funds. These plans have a lower expense ratio as they don't have to pay incentives to sales forces to get the money. The difference between the expense ratios of direct and regular plans varies between 0.05 per cent to 1.50 per cent.
This article was originally published on October 23, 2015.
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