Direct vs Regular Mutual Fund Calculator
Accelerate Your Wealth with Up to 1% Higher Returns
No matter your goals, PriceBridge’s expert-managed, zero-commission Direct Mutual Fund portfolios help you grow smarter—earning more every year by avoiding hidden costs.
What Are Direct Mutual Funds?
Direct mutual funds are investment plans you buy directly from the mutual fund company — without involving brokers, financial advisors, or distributors.
Because there are no intermediary commissions, the expense ratio in a direct plan is much lower than in a regular plan.
This reduced cost translates into higher returns over the long term.
Example:
Let’s say you invest in the Union Focused Fund:
Direct Plan expense ratio: ~1.46%
Regular Plan expense ratio: ~2.49%
If both versions earn a gross return of 12% per year, here’s how the returns differ:
Direct Plan net return: 10.54% (12% – 1.46%)
Regular Plan net return: 9.51% (12% – 2.49%)
That 1.03% difference might appear small, but over years, the power of compounding makes it a big deal.
Simply put, with a Direct Plan, you keep more of your earnings by avoiding distributor commissions.
What Are Regular Mutual Funds?
Regular mutual funds are plans you invest in through brokers, financial advisors, or banks.These intermediaries act as a link between you and the fund house, guiding you through your investment choices.In return for their services, they receive a commission from the AMC — which is added to the expense ratio.
Because of these embedded costs, Regular Plans generally yield lower returns than Direct Plans.
Example
If you invest in the same Union Focused Fund through your bank or an advisor:
The AMC pays them a small commission for facilitating your investment.
That commission is deducted indirectly from your fund’s returns.
So, while both plans invest in the same portfolio, your net gain in the Regular Plan will be lower due to higher expenses.
Regular plans offer professional guidance, but it comes at a long-term cost.
Direct vs Regular Funds: A Performance Comparison
Let’s compare both versions of the Union Focused Fund, launched on 13 August 2019.
It’s open for lumpsum investments starting from ₹1,000.
As of June 2025, the fund’s NAV is ₹26.06, and its Asset Under Management (AUM) is ₹408.33 crore.
| Metric | Direct Plan | Regular Plan* |
|---|---|---|
| Expense Ratio | 1.46% | 2.49% |
| Annualised Return (Approx.) | 10.54% | 9.51% |
| AUM | ₹408.33 Cr | ₹408.33 Cr |
| Fund Manager | Same | Same |
*Regular Plan values include distributor commissions and higher expense ratios, which reduce overall returns.
Even though the difference seems small, over time it leads to substantially lower wealth accumulation in the Regular Plan.
Lumpsum Investment Illustration
Assume you invest ₹1,00,000 as a one-time lumpsum in the Union Focused Fund and hold it for 5 years.
| Plan Type | Investment Amount | CAGR (Approx.) | Maturity Value (Approx.) |
|---|---|---|---|
| Direct Plan | ₹1,00,000 | 10.54% | ₹1,65,000 |
| Regular Plan | ₹1,00,000 | 9.51% | ₹1,59,000 |
The Direct Plan gives a higher maturity value simply because it saves on commission and annual charges.
Debunking Common Myths About Direct Funds
1. Higher NAV Means It’s More Expensive
A higher NAV in a Direct Plan doesn’t make it more expensive.
It only means that fewer fees are deducted daily.
Regular Plan NAVs are lower because distributor commissions are built into them.
What matters is your net return, not the NAV number.
2. Direct and Regular Plans Are Managed Differently
Both plans are managed by the same fund manager, follow the same investment strategy, and hold identical portfolios.
The only difference is cost — Regular Plans include commission, while Direct Plans do not.
3. The 1% Difference Doesn’t Matter
A 1% difference in fees compounds over time and can lead to thousands in lost returns.
For example:
A ₹1 lakh investment at 10% annual return grows to ₹1.65 lakh in 5 years.
The same at 9% grows to ₹1.59 lakh — a ₹6,000 loss simply due to higher fees.
Small percentages make a big impact over time.
4. Direct Plans Are Only for Experts
Not at all.
You don’t need to be an expert to invest in direct mutual funds.
With simple, goal-based tools and guidance from platforms like PriceBridge, even beginners can invest confidently and save on commissions.
Does Compounding Work the Same Way?
Yes — compounding works identically in both plans.
However, Direct Plans let more of your money stay invested, since less is deducted as fees.
This means your returns compound faster, helping you build wealth more efficiently over time.