The short answer: On direct vs regular mutual fund returns, the gap is small each year and large over time. Every mutual fund scheme sells the same portfolio in two wrappers. The regular plan’s expense ratio includes the cost of distribution and the direct plan’s does not. In the two schemes we measured over about 13 years, the regular plan ended behind by 12 basis points a year in an index fund and by 82 basis points a year in a flexi-cap fund. On ₹1 crore that is ₹6.6 lakh and ₹80.9 lakh. The cost is real, it is not trivial, and it compounds.
Investor note, October 2026. Written and reviewed by the Krishna Vriddhi Capital research desk. Updated 21 October 2026. 7 minute read.
Krishna Vriddhi Capital is an AMFI-registered Mutual Fund Distributor and earns commission on regular plans. This note shows what that commission costs, in rupees, on real NAV history.
| Item | Detail |
|---|---|
| Data | AMFI daily NAV history, retrieved through the mfapi.in mirror on 21 October 2026 |
| Method | ₹1 crore lump sum in each plan from the first common NAV date to 19 October 2026; no additions, withdrawals, exit load or tax |
| Schemes | One index fund pair and one flexi-cap pair; fund names withheld, AMFI codes shown in the PDF |
Key takeaways
- Direct vs regular mutual fund returns differ only by cost: the two plans hold the same portfolio, so the lines on the chart never differ in shape. Only their distance grows.
- The gap was positive in every calendar year, because the cost difference is charged every year on everything you hold.
- A regular plan does not prevent a panic sale, and an investor in a direct plan can stay put too. The claim is narrower: the cost of the plan is small beside the cost of one bad decision.
What are direct and regular mutual funds?
A mutual fund scheme is sold in two versions, called plans. A regular plan is bought through a distributor or agent, and part of its yearly cost goes to that distributor as commission. A direct plan is bought straight from the fund house, with no distributor, so its yearly cost, the expense ratio, is lower. The portfolio, manager and risk are the same; the two plans have separate NAVs (the price of one unit), and the direct plan’s NAV grows a little faster because less is deducted.
Direct vs regular mutual fund returns: what did the gap cost in rupees?
| Measure | Index fund pair | Flexi-cap pair |
|---|---|---|
| Period | Jan 2013 to Oct 2026 | May 2013 to Oct 2026 |
| Value of ₹1 crore, regular plan | ₹4.24 crore | ₹8.23 crore |
| Value of ₹1 crore, direct plan | ₹4.31 crore | ₹9.04 crore |
| Cost of the regular plan, in rupees | ₹6.6 lakh | ₹80.9 lakh |
| Cost of the regular plan, in basis points a year | 12 bps | 82 bps |
For the first few years the gap could pass for a rounding error. Compounding does not treat small annual differences as small: by year thirteen the flexi-cap gap is larger than many investors’ annual income.
What does the cost of a regular plan sit next to?
The second half of the note puts the cost beside the bad years. Falls of 10% or more arrived in most years in both plans. In March 2020 the index fund pair fell 38.4% and the flexi-cap pair fell 31.3%.
| If ₹1 crore had been sold at the March 2020 bottom | Index fund pair | Flexi-cap pair |
|---|---|---|
| Value at the bottom | ₹1.34 crore | ₹1.94 crore |
| If held to 19 October 2026 | ₹4.24 crore | ₹8.23 crore |
| Difference | ₹2.91 crore | ₹6.29 crore |
| For scale: the regular plan’s extra cost over 13 years | ₹6.6 lakh | ₹80.9 lakh |
This is hindsight arithmetic: nobody knew those were the bottom days. The PDF also shows what two rebalancing trades in March 2020 cost in tax and how they turned out. A distributor does not know when the market turns and does not claim to. What an investor can have is a conversation in the weeks when it matters, and the decision stays with the investor.
Illustrative only: it uses an assumed ₹1 crore lump sum with no additions, withdrawals or tax, on actual past NAVs. It is not a forecast of any future return or fall, and not a recommendation of any scheme.
Get this note as a PDF
Keep it, forward it, or print it. It is sent to your inbox straight away and has all nine exhibits on direct vs regular mutual fund returns: both pairs year by year, the rupee gap over time, every fall of 10% or more, and the March 2020 comparison.
Want direct vs regular mutual fund returns for your own funds?
Bring your statement and we will show which of your holdings are in regular plans, what they cost, and what you get for it. It is a free 30-minute call with a founder, by video or phone, in any time zone. There is no obligation, and a direct plan is a fair choice if you prefer to act alone. Book a free consultation.
Questions people ask
What is the difference between direct and regular mutual fund plans?
Both plans hold the same portfolio, so the return difference in direct vs regular mutual fund returns is the cost difference. The regular plan’s expense ratio includes a distribution cost, paid to the distributor, and the direct plan’s does not. The two have separate NAVs.
Does the distributor earn commission on regular plans?
Yes. Krishna Vriddhi Capital is an AMFI-registered Mutual Fund Distributor and earns commission on regular plans. See how we are paid.
Why do direct vs regular mutual fund returns differ more in one scheme than another?
The difference in expense ratios was 12 basis points a year in the index fund pair and 82 in the flexi-cap pair. Actively managed schemes usually charge more than index funds, and the distribution cost is part of that.
Which is better, direct or regular mutual fund?
This note does not say. It measures a price: 12 basis points a year in the index fund pair and 82 in the flexi-cap pair. Whether the guidance, paperwork and access behind a regular plan are worth that price is for each investor to decide, and the direct vs regular mutual fund returns gap is one input.
What is the expense ratio difference between direct and regular plans?
In the two schemes measured, the annual return difference was 12 basis points (0.12%) and 82 basis points (0.82%). Other schemes will differ; each scheme’s factsheet shows the expense ratio of both plans.
Does this mean everyone should choose the direct plan?
No. This note measures a price. Whether the guidance, paperwork and access behind a regular plan are worth that price is for each investor to decide.
Sources
AMFI daily NAV history (amfiindia.com) via the mfapi.in mirror, retrieved 21 October 2026. Calculations by the Krishna Vriddhi Capital research desk. Scheme names are withheld; this note is about arithmetic, not about any fund house.
Investor education only. Mutual fund investments are subject to market risks; past performance is not indicative of future returns. Not investment advice or a recommendation of any scheme. More notes are in the research library.