Direct vs regular plans: the 1.16-point equity fee gap

The number

For an equity mutual fund, the regular plan costs a median 1.16 percentage points a year more than the direct plan of the same scheme.

That is from the expense ratios fund houses report to AMFI, as published at the end of September 2026. It covers 543 equity schemes at least a year old that report both plans.

The two plans hold the same portfolio, run by the same manager. The difference is the trail commission paid to the distributor who sold you the regular plan, which comes out of the fund's assets every day you hold it.

The gap by asset class

The gap tracks how much a fund charges in the first place. Equity and hybrid funds, the most expensive to own, carry the widest gap. Index and debt funds carry the narrowest.

In every category the median regular plan costs more. Only five schemes, all fund of funds, report a regular expense ratio at or below the direct one.

Category by category

Each column is a separate median, so the gap column is the median of each scheme's own gap rather than the difference between the two medians.

In a liquid or overnight fund the gap is a tenth of a point or less. In a flexi cap or balanced advantage fund it is more than a full point. The one-off choice of plan matters most in exactly the funds people tend to hold longest.

What it compounded to

An expense ratio is a forecast of cost. The NAVs show what it actually cost.

For each scheme that has had both a direct and a regular Growth plan for ten years, we compared the two plans' ten-year returns to 30 September 2026.

Both columns are medians across schemes. So for the typical equity fund, ₹10 lakh in the direct plan ten years ago would now be worth about 10.2% more than ₹10 lakh in the regular plan of the same fund. Nothing else differed: same stocks, same manager, same days.

Over five years the equity gap was 1.23 points a year, across 323 schemes, close to the fee gap AMFI reports today.

What this does not tell you

The commission pays for something. A regular plan's extra cost buys a distributor's help: choosing funds, paperwork, sometimes a nudge not to sell in a crash. If that advice is worth more than a point a year to you, the regular plan can still be the right choice.

Today's expense ratio is not the one charged for ten years. SEBI has cut the caps more than once, so the fee gap over the last decade was not constant. The ten-year table measures what was actually charged.

Switching plans can trigger tax. Moving from a regular to a direct plan counts as a redemption and a fresh purchase, so it can create a capital gain. Many schemes waive the exit load on a switch between plans of the same scheme; the scheme's documents say whether yours does.

Where to go from here

The direct vs regular calculator works through your own amount and horizon, and the impact of 1% shows how a fee difference compounds. The guides on direct vs regular plans and what a fund really costs explain the mechanics.

For the dearest equity funds by expense ratio, see the highest-cost equity funds. For the cheapest end of the market, see Nifty 50 index funds ranked by cost.

For how active large-cap funds did against their index after costs, see large-cap funds vs the Nifty 50.