India’s mutual fund industry sees sustained investor loyalty to regular plans, with data showing longer holding periods compared to direct plans, despite cost advantages of the latter.
India’s mutual fund market is increasingly split between direct and regular plans, but fresh remarks from Securities and Exchange Board of India whole-time member Amarjeet Singh suggest that the longer holding power still sits with regular plans. At an NJ Partners Business Training 2026 event on 13 August, Singh said systematised investment plan assets now account for more than a fifth of the industry’s total assets and pointed to data showing that 34% of SIP assets in regular plans have been held for more than 5 years, compared with 20% in direct plans.
The figures do not prove that distributors themselves cause longer investing, but they do suggest different investor behaviour across the two routes. Regular plans use intermediaries and typically carry higher costs, while direct plans allow investors to buy from the asset management company without a distributor, cutting expenses. SEBI’s investor education material says the choice depends on whether an investor wants professional guidance or is comfortable making decisions alone.
The broader pattern appears to fit other recent reporting. Livemint said only 30% of individual investors’ mutual fund assets are parked in direct plans, with regular plans still dominant among retail buyers. Business Standard also reported that SIP closures in direct plans were 2.6 times higher than in regular plans in B-30 markets, reinforcing the view that distributors often act as a behavioural support for investors during volatile periods.
Singh has made a similar case elsewhere, saying retail mutual fund assets are staying invested beyond 24 months and that domestic mutual fund money, including SIP flows, has helped steady Indian markets during periods of foreign outflows. Even so, the cost advantage of direct plans remains real, which means the better option still depends on whether an investor values lower fees or more hand-holding.
Disclaimer: This article is intended to inform and educate, not to recommend or endorse any financial product, investment or strategy. Please consider your own financial circumstances and seek professional advice where appropriate before making financial decisions.
