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Lindo commented on 03 Oct 2019, 12:39 PM

Dear Satpal,

There are two modes in which mutual funds are sold,
1) Via a distributor(bank/advisor/third party sites)
2) Direct ( by choosing this option or using platforms like Coin etc)
In the distributor model, there is a portion of your investment paid to the channel for getting business and therefore net returns for the investor will be lower. In the direct mode, you are bye-passing the distributor and therefore no distributor commissions are adjusted in your investment and hence you get better returns.

Now the rate that you mentioned, is called NAV ( net asset value) of the scheme. Just like the value of any product is mentioned with respect to a unit’s cost ( say the Gold price is quoted at per gram rate). The Fund manager in the case of mutual funds for both Direct and Regular schemes invests money in the same securities but since there are commissions involved in the Regular mutual funds, the NAV(rate) will be lower. (Consider 18 caret and 22 caret gold rates as an example.) The NAV is a wrong condition to choose a fund. What you should be looking at and comparing is the returns and expense ratio.
Check this
On Coin, you can do the comparision and see what is the difference in returns between the regular and direct option.
Check this

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