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Direct mutual funds

  • Offers good returns for a longer duration

  • Investors don't have to depend on third parties to make investments

  • Transaction charges are not collected

A mutual fund is a sort of monetary vehicle composed of a pool of cash gathered from numerous financial backers to put resources into protections like stocks, securities, currency market instruments, and different resources.

Features of direct funds

    The following are the features of the direct funds:

  • Investors don't have to depend on third parties to make investments.
  • You can invest in direct funds both online and offline.
  • Since there are brokers involved there are no commission fees so the fund house will not impose the distributor fee.
  • Transaction charges are not collected.
  • The word ‘direct’ serves as an indication of direct funds.

The best direct mutual funds would have the following qualities:

  • Has offered good returns for a long period.
  • Less affected by market fluctuations.
  • The expenses ratio is lower when compared to peer funds.
  • Offers diverseness of the portfolio.
  • The fund manager has an excellent track record.

Direct funds are those mutual fund schemes that are directly offered by the fund house or an Asset Management Company(AMC). The names of these funds are prefixed by the word ‘direct’. There is no involvement of a third party, distributor, or agent. The investors directly deal with the AMC offering the fund without any third party or broker. Since there is no involvement of a third party, there are no commissions or brokerage charges involved in these transactions. Hence, the expense ratio of direct plans is comparatively lower than that of regular funds.