Direct and regular mutual fund plans invest in the same portfolio and are managed by the same fund manager. However, their returns can differ because of how investors purchase them and the costs involved.
You may find both plans on the same platforms, but direct plans are routed directly through the asset management company (AMC), while regular plans are bought through intermediaries such as brokers or mutual fund distributors.
Since regular plans include distribution-related costs, they have a higher expense ratio, which can reduce investors’ returns over time.
To improve transparency around these costs, Securities and Exchange Board of India (SEBI) Chairman Tuhin Kanta Pandey said in his address at NDTV Profit IGNITE, released on Wednesday, “From November 1, Direct Plans will be the default option on digital platforms of AMCs. Investors choosing Regular Plans must be informed about their higher expense ratio.”
The total expense ratio (TER) covers the costs of running and managing a mutual fund scheme and is expressed as a percentage of its average net asset value (NAV). These expenses are deducted before the daily NAV is disclosed, affecting the returns investors ultimately receive.
But how much difference can choosing a regular plan over a direct plan of the same equity mutual fund make to your final corpus over 10 years? Here’s what the numbers show.
Which 5 equity mutual funds delivered the highest 10-year SIP returns?
The table below compares the 10-year SIP returns of the top five equity funds based on direct-plan performance, alongside the corresponding regular-plan returns and the final corpus from a ₹1,000 monthly SIP.
| Top 5 equity funds | Direct plan 10-year SIP return | Regular plan 10-year SIP return | Direct plan corpus after 10 years | Regular plan corpus after 10 years |
| Quant Small Cap Fund | 24.36% | 23.09% | ₹4,35,872 | ₹4,06,926 |
| Quant Infrastructure Fund | 21.38% | 19.90% | ₹3,70,975 | ₹3,42,456 |
| Bank of India Manufacturing & Infra Fund | 20.73% | 19.09% | ₹3,58,165 | ₹3,27,800 |
| Nippon India Small Cap Fund | 20.53% | 19.50% | ₹3,54,314 | ₹3,35,137 |
| Quant ELSS Tax Saver Fund | 20.17% | 18.56% | ₹3,47,488 | ₹3,18,557 |
*Source: Value Research; Returns as on 28 October 2026; 10-year XIRR returns
If you had started a ₹1,000 monthly SIP in Quant Small Cap Fund 10 years ago, your total investment of ₹1.2 lakh would have grown to ₹4,35,872 under the direct plan, compared with ₹4,06,926 under the regular plan. This translates into a difference of ₹28,946 over the 10-year period.
The difference stems from the expense ratio. According to AMFI data, Quant Small Cap Fund charges 0.90% for its direct plan and 1.73% for its regular plan as of 15 October 2026.
Similarly, in Quant Infrastructure Fund, the same monthly SIP would have grown to ₹3,70,975 in the direct plan, against ₹3,42,456 in the regular plan.
The gap becomes more significant as the SIP amount increases. For instance, a ₹10,000 monthly SIP in Quant Small Cap Fund over the same period would have resulted in a difference of approximately ₹2.89 lakh between the two plans.
These show how differences in expenses and returns can compound over the long term. However, investors should also weigh the value of professional guidance and other services offered through distributors before choosing between direct and regular plans.
Disclaimer: This is purely for educational/informational purposes and should not be taken as any sort of investment advice. Always consult a SEBI-registered advisor before making any investment decisions.