LTCG: How Direct Plans are better than Regular Plans


LTCG: How Direct Plans are better than Regular Plans

There has been a severe disappointment among the investor community after LTCG being reintroduced by our finance minister from FY18-19.  Is it really worth the disappointment? Let us see how the impact of LTCG can be minimized with direct mutual funds.

In order to compare different category of funds, we went back to 2015 February (to accommodate ELSS schemes in comparison).  We also did not consider grandfather clause in our NAV’s as it wouldn’t make any difference to our comparison.

The below table indicates the returns fetched by Regular fund’s if invested on 5th February 2015.LTCG

Now let us consider what would have happened to the investments if made on direct plans of the above mutual fund schemes on the same day.


The below table provides a comparison of direct fund returns with regular fund returns after LTCG.


From the above table we can clearly see that regular funds could dent anywhere between 6% and 12% of your portfolio returns when compared to their direct counterparts.

LTCG on equities cannot be changed but your mutual fund plan can be, so why do you wait?? Switch to direct funds now using WealthTrust app and save your post LTCG returns.

Know more about Regular Funds vs Direct funds

New to Mutual Funds? Learn more about basics of mutual funds.

Visit our website to know more about WealthTrust. Do read our blogs on Mutual funds.

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