Five changes that have transformed your mutual funds

"It is not the strongest of a species that survives, nor the most intelligent. It is the one most adaptable to change." There's controversy over whether it was Charles Darwin who said this, but it is a perceptive quote. The reason why the Indian mutual fund industry has managed to beat back many other competing financial products and emerge as a go-to investment for the retail investor is that it has reinvented itself many times over in the last two decades. If you thought the evolution of the industry was done and dusted with the SEBI barring entry loads way back in June 2009, you're mistaken. Here are five big changes that mutual funds have gone through in the last five years that have made a massive difference. 1. The rise of direct It was through an innocuous sounding provision slipped into a circular on 'Steps to re-energise the mutual fund industry' that SEBI introduced direct plans into mutual funds from January 1, 2013. When it was first proposed that all mutual funds offer a separate plan for investors who didn't rely on distributors, no one was clear whether these plans would really take off. But six years on, AMFI data suggests that over Rs 11 lakh crore of the industry's assets under management, or 42 per cent of its total assets, are lodged in direct plans. While 74 per cent of this direct money is in debt funds, the rest is in equity funds, hybrid products and ETFs. The rise of DIY investing via direct plans can be traced to several factors. Institutional investors who were using the intermediary route to invest treasury money in debt funds were the first to hop onto direct plans in a bid to cut out commissions and eke out higher returns. The mushrooming of online resources where investors could do their own research from third-party rating agencies such as Value Research, to blogs and the financial press helped retail DIY investors in their choice of funds. In the last couple of years, the evolution of free transaction portals, such as MF Utility, Paytm Money, Kuvera and Zerodha Coin that allow investors to transact in the direct plans of multiple AMCs on a single platform has given