​Mutual funds are available in two modes of investment: Direct Plan and Regular Plan. While both plans invest in the same underlying portfolio, the difference lies in how they are accessed and how fees are charged.

Regular Plan
When you invest in a regular plan, the investment is routed through a distributor or advisor. In return, the Asset Management Company (AMC) pays a commission to the distributor. This commission is included in the fund's expense ratio and is ultimately borne by the investor. As a result, regular plans typically have a higher expense ratio, which slightly reduces the investor’s returns over time.

Direct Plan
A direct plan involves purchasing mutual fund units directly from the AMC without involving a distributor. Since no commission is paid out, the expense ratio is lower. The entire benefit of cost savings is passed on to the investor, resulting in higher long-term returns compared to regular plans.

Tradejini, through its CubePlus platform, offers only direct mutual fund plans. This ensures that investors retain the full benefit of their investment without losing a percentage to distribution fees. The approach is aligned with long-term wealth creation at zero commission cost.

What is an Asset Management Company (AMC)?
An AMC is a financial institution that manages pooled funds from investors and allocates them into various assets such as equities, bonds, and government securities. Examples of AMCs include HDFC Mutual Fund, SBI Mutual Fund, and Nippon India Mutual Fund.

Who is a distributor?
A mutual fund distributor is an individual or organization that facilitates investment transactions between the investor and the AMC. Distributors are compensated by AMCs through commissions, which are deducted from the investor’s investment in regular plans.

By choosing direct plans through CubePlus, investors eliminate the role of distributors, reduce costs, and retain more value from their mutual fund investments.

Read more on why Mutual Funds on CubePlus are better for long term wealth creation.​