Dear Sir,
I am new to zerodha…i have analysed ABSL infrastructure fund(G) for last 19 Month.
Comparison between Direct NAV and Regular NAV along with Unit Purchased. i found that regular fund giving more units than Direct then what is the benefit…end of the year regular giving more amount than direct purchase.
I have also raised query to support…request you to clarify.
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Let me give you an analogy and explain.
Will you buy 12 mango’s of 70 gms (12 x 70 = 840 gms) or 10 mango’s of 100 gms (10 x 100 = 1000 gms) if both costed you Rs 1000?
Of course 10 mango’s because you get 160 gms more of mango right? You wouldn’t buy 12 mango’s thinking you are getting more mango’s right?
Direct funds are also like that. Because no commission is paid out, NAV is higher than regular funds. Hence you get lesser number of units. But like in the mango’s example, how many units you get doesn’t matter at all. More units doesn’t mean better. In mutual fund investing, what matters is return on your investment. By investing in direct mutual fund, you don’t pay that extra commission to distributor from the time you invest. All that money remains with you.
Check the direct savings calculator on Coin to see the total savings you can make. Find below example for DSP tax saver. Savings of 28lks for 5k SIP if markets returned 15% in the long run.
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