6 things that will give you a million, done correctly
Intelligent Investor Series
Hopefully, you might have made great returns since the 2020 tide (hopefully have not missed the rising tide of the markets, but even if you have, there’s good news!). This gives you the confidence to make more investments, and returns look almost easy to achieve. However, these are precisely the moments in the market where one needs to be careful — as alpha is never easy to make for the long term. There are many online investment platforms that encourage you to trade or buy direct funds — looks neat, clean and easy to do right? So why would anyone not invest in direct funds?
To understand this, let’s look at the structure of a mutual fund. As you can see from the table below, everything remains the same, but the expense ratios (fees the fund charges from you).
Regular vs Direct Mutual Fund Plan
Direct Plan (via DIY Investor)
Regular Plan ( Via Broker)
Return on Investment
Reason for Difference
No commissions are involved since you purchase the units directly from the AMC (Kotak, SBI, etc.)
Commission paid by AMC to your broker (if any) in the form of distribution expense/transaction fee.
Interestingly, we meet many of these investors, who, having tried to invest on their own and learned the hard way, want professional help to be able to do it better, with lesser risk and a higher alpha performance. So the question we asked ourselves is if Direct is really good, then why would anyone need help?