As India’s mutual fund industry sees growing participation, a segment of investors is becoming increasingly aware of costs, transparency, and the need for independent research. As a result, some investors are choosing to invest directly with asset management companies rather than relying solely on distributor-led channels.
Direct mutual fund plans allow investors to invest without routing transactions through intermediaries such as distributors. While the underlying portfolio and investment strategy remain the same as that of regular plans, the distinction lies in the expense structure and the mode of access.
This article explains how investing in direct mutual funds works in 2026, how investors may approach the process responsibly, and what factors require careful consideration before proceeding.
Table of Contents:
- Understanding direct vs. regular mutual funds
- How to select a suitable direct mutual fund
- Potential challenges and considerations for direct investors
- Why Bajaj Finserv AMC mutual funds?
- How to invest in direct mutual funds online with Bajaj Finserv AMC
- Investing in direct mutual funds offline: A comprehensive guide
- Essential documents required for direct mutual fund investment
Understanding direct vs. regular mutual funds
Direct and regular mutual fund plans invest in the same underlying securities and follow the same stated investment mandate. The difference lies in how investors access the scheme.
Regular plans are purchased through distributors, who facilitate scheme selection, documentation, administrative processes, and ongoing investor support. Direct plans, on the other hand, allow investors to invest independently with the asset management company, without distributor involvement. Thus, for direct plans, investors may need to be familiar with mutual fund concepts, independently research and select funds based on their risk profile, understand portfolio construction principles, monitor their investments regularly without guidance. Investors should assess their knowledge of financial markets before opting for direct plans.
Expense ratios for regular plans are typically higher, as they include distributor commissions. Direct plans exclude these commissions, resulting in a lower expense ratio. While the investment portfolio and strategy remain identical, service aspects may differ as direct investors manage their investments independently without distributor support.
Also Read: Direct vs Regular Mutual Fund: What’s the difference?
How to select a suitable direct mutual fund
Selection of a direct mutual fund depends on an investor’s financial objectives, time horizon, and risk appetite. The following approaches may support informed evaluation:
Define financial goals
Investors may first identify whether their objectives are short term, medium term, or long term before evaluating suitable fund categories.
Review historical performance
Past performance does not indicate future outcomes. However, reviewing historical data may help investors understand how a fund has behaved across different market phases. Factors such as consistency, expense ratio, and portfolio composition may be reviewed in context.
Past performance may or may not be sustained in future.
Assess fund characteristics
Investors may examine parameters such as risk level, asset allocation and stated investment approach, as disclosed in scheme documents.
Evaluate transparency and disclosures
Funds with clearly articulated strategies and regular disclosures may support informed decision-making. Direct plans require investors to rely primarily on publicly available information.
Potential challenges and considerations for direct investors
Direct investing requires investors to independently manage several aspects, including:
- Scheme selection and application
- Ongoing portfolio monitoring
- Redemptions
- Understanding tax implications
- Awareness of exit loads
- Reviewing scheme disclosures periodically
These considerations apply across mutual fund plans, but direct investors manage them without distributor support, which may require greater involvement and understanding.
Also Read: How to Switch From Regular Plan to Direct Mutual Funds?
Why Bajaj Finserv AMC mutual funds?
Investing in Bajaj Finserv AMC’s mutual funds gives investors access to portfolios managed using a disciplined, long-term investment approach and led by an experienced fund management team.
The AMC follows a research-driven process guided by its in-house InQuBe investment philosophy, which brings together data-based insights (Information Edge), structured analysis (Quantitative Edge), and principles of behavioural finance—an area of study that examines how investor behaviour and emotions influence markets. Along with this, several schemes also follow the unique Megatrend investing strategy, building a future-focused portfolio that focuses on long-term structural themes that may influence the economy and markets over time.
Bajaj Finserv AMC offers a broad range of mutual fund schemes across equity, debt, and hybrid categories, along with index funds and ETFs. You can view our mutual fund schemes here.
Investors opting for Bajaj Finserv AMC’s direct plans can also use its digital platform to make transactions and track their portfolios with ease.
How to invest in direct mutual funds online with Bajaj Finserv AMC
The following steps outline how investors may invest in direct mutual funds through online platforms:
- Visit the Bajaj Finserv AMC website
Go to the official Bajaj Finserv AMC website (www.bajajamc.com) and navigate to the transaction portal by clicking on Login/Register on the home page.
- Sign up
Submit your PAN details and sign-up through a quick onboarding process.
- Ensure your KYC is complete
If you are KYC Validated, you can continue with your investment journey; if not, you will need to complete your KYC Validation process.
- Select your preferred mutual fund scheme
Once logged in, investors can view available mutual fund schemes. Identify a suitable scheme based on your goals, risk appetite and the scheme’s investment objective and risk classification, as disclosed in scheme documents.
- Choose a plan
On the transaction page, select the scheme from the drop-down menu and choose ‘Direct’ under the Investment Mode option.
- Make the transaction
Investors may invest through a systematic investment plan or through a lumpsum transaction. For SIP, a bank mandate will need to be registered to enable auto-debit of instalments.
- Complete payment and receive confirmation
Payments may be made through approved banking channels such as net banking or UPI. Upon successful processing, investors receive transaction confirmation. Units are allotted based on the applicable net asset value, in line with SEBI cut-off timing rules.
Investing in direct mutual funds offline: A comprehensive guide
Investors who prefer offline processes may invest directly by visiting AMC branches of official points of acceptance.
The offline process generally includes submitting a completed application form, KYC documents, bank details, and payment through acceptable modes such as a cheque or a demand draft.
Also Read: A Beginner Guide to Choose Your First Mutual Fund Online
Essential documents required for direct mutual fund investment
While the investment process and documents may differ from one AMC to another, here are some common documents that may be required.
- PAN card details
- Bank account details
- Proof of address and proof of identity (if KYC needs to be done).
Exact documentation requirements may vary based on regulatory updates and investor category.
Conclusion
Investing in direct mutual funds in 2026 reflects a preference among some investors for cost awareness and independent engagement with investment decisions. Direct plans provide direct access to asset management companies and transparent expense structures. However, since there is no distributor guidance and support, investors need to be equipped to make and manage their investments independently.
FAQs
Is a demat account mandatory for investing in direct mutual funds?
No. Mutual fund units may be held in statement form directly with the asset management company. A demat account is optional.
Can I switch my existing regular mutual funds to direct plans?
Yes. Switching from a regular plan to a direct plan of the same scheme involves redeeming units from the regular plan and investing in the direct plan. Such transactions are treated as redemptions and may have tax implications.
What are the taxation implications for direct mutual funds?
Tax treatment depends on the fund category and the holding period, in line with prevailing income tax regulations. Equity-oriented and debt-oriented funds are taxed differently.
How do I track my direct mutual fund investments with Bajaj AMC?
Investors may track their portfolios through the Bajaj Finserv AMC website and the statement of account. They may also refer to the Consolidated Account Statement (CAS), issued by depositories or RTAs, which provides details of all mutual fund folios registered under a single PAN.
Who should consider investing in direct mutual funds?
Direct plans may be suitable for investors who are familiar with mutual fund concepts and prefer managing investments independently.
Are there any hidden charges in direct mutual funds that I should be aware of?
No, direct mutual funds do not carry hidden charges. The expense ratio applicable to a direct plan is disclosed upfront in scheme documents and includes the costs of managing the fund. However, applicable statutory charges or taxes, if any, are levied as per regulations and may vary based on individual circumstances.
