Ask Morningstar: Is it wise to switch from Regular to Direct?

Dec 20, 2022

My total SIP is close to Rs 50,000. What do you think of the funds? Is there too much overlap?

I invest in the direct plans of:

  1. Nifty 50 Equal Weight Index Fund
  2. NASDAQ 100 Index Fund
  3. NASDAQ 100 Index Fund

Currently, these are regular plans and I want to switch to the direct plans of:


You mentioned that these are regular plans which means that these funds were recommended to you by a mutual fund distributor.

Since you want to switch to direct plan of these funds, we are curious to know that are you not taking the services of your distributor anymore? And if not, then is there someone who is advising you on your investment.

Frankly the investment process involves multiple aspects. It’s not just shortlisting funds ones and keep on investing in them till eternity. In between a lot of factors may change, which could be fundamental in nature, and may have a bearing on your investments. For example – change in manager or change in strategy or even performance pattern of a fund, these require regular monitoring to ensure that the funds continue to meet your investment objective and risk appetite. It could be a tedious task for an investor to independently track these factors on a continuous basis. Hence a distributor plays a vital role here as he tracks the investments for investors.

Therefore, for investors who doesn’t have the time and skills to track their investments and conduct this mandatory analysis should ideally opt for the services of mutual fund distributor/advisor.

Having said that, if you feel that you don’t need an advisor/distributor and you can short list funds and continue with your investments then you can switch to direct plans.

Coming to the funds that you have invested in, all of them have relatively different investment mandate and hence they don’t have too much of an overlap.

Most of the funds are also good and have an impressive long term track record. However, if you want you can consider adding a value fund to your portfolio such as ICICI Prudential Value Discovery. This fund can come in place of Invesco India Contra Fund. This does not mean that you have to exit from Invesco India Contra Fund, rather you can direct future investments to ICICI Prudential Value Discovery. Value funds have a broader scope and can capture wide range of investment opportunities. Additionally, it also compliments growth-oriented funds in your portfolio such as SBI Bluechip well.

The index funds that you have invested in are good choices.

Articles authored by Himanshu Srivastava

Fund research reports


Registered readers can post their queries by accessing the Ask Morningstar tab. Our team will answer SELECT queries relating to mutual funds, portfolio planning and personal finance. While we provide broad guidelines, we suggest you consult a financial adviser before making investment decisions.

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