InvestorQ : What are regular mutual funds? Please suggest a good regular fund.
Karim Sahu made post

What are regular mutual funds? Please suggest a good regular fund.

Pratik vyas answered.
4 years ago

Choosing between mutual funds involves going over numerous questions such as: which asset class to invest in; for how long you will be able to keep the money invested;

do you want to get any fixed income at regular basis, etc.

Yet another important question finds its way in this long list: Do you want to invest in direct mutual fund or regular mutual fund?

Thus, let’s understand what a regular mutual fund is.

If you buy a mutual fund via a mutual fund broker, distributor or advisor, or agent, then you are investing in a regular mutual fund.

What this essentially means is that your buying price, or the NAV of your mutual fund,

will be inclusive of the commission the fund house pays to the various middlemen for bringing in a new investor.

It is an incentive given by mutual fund houses to various entities for helping them grow their business.

The fund house charges you this commission amount in the expense ratio.

This is why regular fund NAVs are slightly expensive that direct fund NAVs.

For example: In the image above, you can see:

1. Expense ratio of the regular plan is higher than that of the

2. Thus, NAV of both growth and dividend options is higher in case of direct plan.

Any fund which fulfills your criteria of investment tenure, asset class, growth or dividend is a good fund for you.

The fund’s performance does not vary across the regular or direct options of mutual funds.