All Mutual Fund Schemes offer two plans- Direct and Regular. In a Direct Plan, an investor has to invest directly with the AMC, with no distributor to facilitate the transaction. In a Regular Plan, the investor invests through an intermediary such as distributor, broker or banker who is paid a distribution fee by the AMC, which is charged to the plan.
Therefore, the direct plan has a lower expense ratio as there is no distribution fee involved, while the regular plan has a slightly higher expense ratio to account for the commission paid to a distributor to facilitate the transaction.
Managing a MF scheme entails costs and expenses, like fund management expenses, sales and distribution expenses, custodian and registrar fees etc. All such expenses are covered by
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