Direct vs Regular plans: the return gap, from NAVs

The gap, measured

Almost every scheme on sale in India comes twice: a Direct plan, bought without a distributor, and a Regular plan, bought through one. They hold the same portfolio. The only difference is the expense ratio, and over time it shows up in the NAV.

We measured that difference directly. For each scheme, we took the Direct and Regular Growth options and computed both returns between the same two dates, ending on Tuesday 24 March 2026. Across 372 equity schemes with three years of history in both plans, the Direct plan came out ahead by a median 1.31 percentage points a year.

For debt schemes the median gap was 0.36 points a year. For index funds, 0.32.

Which funds are in this

We started from the 1,750 Direct Growth schemes with a recent NAV, and matched each to its Regular Growth sibling: same fund house, same scheme, different plan. 1,686 matched cleanly. Of the other 64, 41 have no Regular Growth plan we could match to them, and 23 have several legacy Regular plans (retail, institutional) that we left out rather than guess between.

Of those, 1,673 pairs have a NAV on 24 March in both plans. We count a pair in a period only if both plans have a NAV on the same start date: 1,486 pairs over one year, 1,131 over three years and 788 over five. One-year figures are plain percentage returns; three and five years are annual rates.

Equity: about 1.3 points a year

Median gap in percentage points a year (Direct minus Regular).

The spread inside equity is wide. Over three years the smallest gap was 0.07 points and the largest 2.34; 292 of the 372 pairs differ by a point a year or more.

Notice that the one-year column is lower than the three-year one in almost every row. That is not a cut in fees. The expense ratio is a percentage of assets, so the gap it opens in a return grows with the return itself. Over the past year, the median Direct equity plan returned −0.15% and the median Regular plan −1.27%. Over three years, with returns near 16% a year, the same fees cost more in points.

Hybrid, index and debt

The debt rows are where the gap matters most relative to the return. A corporate bond fund's 0.36-point gap is small in absolute terms, but set against a median debt return of about 7% a year it is roughly a twentieth of what the fund earns.

Arbitrage funds stand out. Over three years their median Direct plan returned 7.59% a year and corporate bond funds' 7.47%, almost the same, yet the arbitrage gap of 0.74 points is twice the corporate bond one.

What 1.3 points adds up to

Take the median Direct equity plan's five-year return to 24 March, 14.76% a year, and the median five-year gap, 1.26 points. On ₹1 lakh invested five years ago, the difference between those two rates is about ₹10,700 today, on a pot of about ₹2 lakh.

What this does not tell you

The gap is a fee, not a verdict on the fund. A Regular plan pays for a distributor's service. Whether that service is worth the cost is a judgement this data can't make.

Some schemes are not here. Funds with several legacy Regular plans, or with a Regular plan launched later than the Direct, drop out of the comparison.

Past gaps track past fees. If a fund changes its expense ratios, its future gap changes with them. None of this is advice to buy or sell any fund.

Where to go from here

Our guide to Direct vs Regular plans explains where the commission sits, and what a fund really costs covers the rest of the bill. The Direct vs Regular calculator runs the arithmetic on your own amount and horizon.

For one category in detail, see ELSS funds before 31 March, and for the large-cap picture, large-cap fund returns in March.