Switching Strategies to Direct Plans Offered by MF Houses?

#1
Hello All,

Now that Direct Plans offered by MFs is a reality, am sure a lot of people, especially those who invest directly with their MFs (and not through advisors) will be tempted to switch their existing funds into their equivalent direct plans. The expense ratios on the Direct Plans are expected to be in the range of 0.25-0.75% cheaper than on their equivalent retail plans.

Many Fund Houses (I am aware of DSP Blackrock, ICICI Prudential, HDFC and IDFC at least) are offering investors who have invested directly with them to switch their regular fund holdings to direct plans without any exit load (assuming investments were done within the past 12 months). The only costs would be Securities Transaction Tax (0.25% of the amount) and perhaps Short Term Capital Gains Tax (~15.45% of capital gains).

What I am interested in knowing is what our forum members have planned to do with their investments? How are you planning to make this switch that would be helpful in the long-term due to a lower expense ratio? Would it be a one-time all units switch? Or would it be partially over the months as the markets are near all time highs and uncertainty looms on what will happen next (which would also mitigate the ST Cap Gains Tax). Or would you book profits in your MF units and re-invest all your MF investment once again on an SIP basis?

Share your thoughts!!
 

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