Direct Plan Vs Regular with Example
Axis Blue Chip Fund has been one of the top performing funds during the year 2018 and has comfortably beaten its benchmark NIFTY 50 during the year. If we look at the Expense Ratio of Regular and Direct Plans of this Fund on ValueResearchonline, they are as follows :
As we can see that the Expense Ratio in case of Regular Plan is 2.29% and in case of Direct Plan is 0.89%, a difference of 1.4%. What is means to individual investor is that whatever be the returns of the Fund the returns in Direct Plan will be 1.4% higher.
To get a perspective of what this 1.4% returns means is that if you have Rs. 10,00,000 invested with 1.4% returns for a period of 5 years, your total corpus becomes 10,71,998, i.e. Rs. 71988 additional return.
It is my firm opinion that investors need to seriously consider enhancing their returns by moving to Direct plans.
Disclaimer : The above example is only for illustration and not a recommendation for investing in Axis Bluechip Fund. I am a SEBI RIA dealing only in Direct Plans.