[www.keralites.net] Difference between : Growth / Dividend in MF

 

The Mutual Fund schemes normally offers different types payout option, the investor can choose these options based on their income requirements and investment objectives

1)      Growth Option -  If you select this option there will not be any  dividend payout.    The income earned on the scheme is again reinvested in the scheme itself  that will  finally get reflected in the scheme NAV. 

2)       Dividend Re-investment option – the dividend declared in the scheme is again reinvested and additional units will be allotted to you based on the current scheme NAV

3)      Dividend Payout -  The income earned on the scheme is distributed as dividend like company dividend 

All the above options has its own tax implications.  Dividend paid by equity schemes are fully exempted from income tax.   If you sell the units after a holding period of one year, the resultant gain will be   treated as long term capital gain and fully exempted from tax.

Best Regards

Prakash Nair 

Difference between : Growth / Dividend in MF

Posted by: "Seb S" dxnstocks@gmail.com
Sun Apr 1, 2012 3:38 am (PDT)

Dear Friend,

Can you please guide me which option i can select
a MF from the following: Growth Dividend - PayOut Dividend -
PayOut What is the differenet between the above three,

Thank you & reagards,
seb.

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