Regular vs direct mutual funds: 34% of regular SIP assets held 5+ years as compared to 20% direct

SIP investments through regular mutual fund plans appear to have a stronger long-term holding pattern than those made through direct plans, according to data cited by SEBI whole-time member Amarjeet Singh. Around 34% of SIP assets in regular plans have been held for more than five years, compared with 20% of SIP assets in direct plans.

Singh highlighted the data while speaking on the role of mutual fund distributors and the future of distribution at the NJ Partners Business Training 2026 event in association with FICCI on August 13. He said SIP assets now account for more than 21% of the mutual fund industry’s total assets.

Regular vs direct plans: What does the data show?

According to the data cited by Singh, the proportion of SIP assets held for more than five years is significantly higher in regular plans than in direct plans.

Singh said the figures were “indicating a stronger long-term orientation in regular plans.”

Regular plans involve distributors, while direct plans are invested without a distributor. Singh used the holding-period data to underline the continuing role distributors can play in helping investors remain invested for the long term.

Distributors as a behavioural anchor

Singh said the data points to the role of distributors as a “behavioural anchor”, particularly during periods of market volatility.

“Investors may otherwise be tempted to stop SIPs, redeem investments, or chase schemes and asset classes that have performed well recently,” he said.

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According to Singh, distributors can provide perspective to investors when markets fluctuate and help prevent short-term market movements from influencing long-term investment decisions.

“A distributor can provide perspective and help ensure that short-term market movements do not drive long-term investment decisions,” he said.

Does this mean regular plans are better?

The data cited by Singh shows a difference in holding behaviour, but it does not establish that using a distributor directly causes investors to hold SIPs for longer. His comments instead highlight one potential role of distributors in encouraging disciplined, long-term investing.

The distinction is also important because regular and direct plans differ in their cost structures. Investors in regular plans use distributors, while direct-plan investors deal directly with the fund house or through platforms that offer the direct route.

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Why the data matters

Singh’s comments come as the mutual fund industry expands rapidly. Industry AUM has reached around ₹85 lakh crore, while mutual fund folios have crossed 27 crore and unique investors have exceeded 6 crore. Around 71% of mutual fund assets held by retail and HNI investors continue to come through distributors.

The holding-period data therefore provides a useful indicator of how regular and direct investors have behaved over the longer term, while also highlighting the role SEBI sees for distributors in helping investors stay focused on long-term financial goals.

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