Ch.6 · Distributor Commission Structure · easy
What is a Direct Plan and how does its TER compare to a Regular Plan?
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EXPLANATION
The Direct Plan has a lower TER than the Regular Plan because no distributor commission is included. The difference in TER (typically 0.5%–1.5% per year) compounds over time, resulting in a meaningfully higher NAV for Direct Plan investors. The underlying portfolio is identical; only the cost differs.
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