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lucky_asthana | What is the meaning of growth and dividend option in mutual fund ? |
when you see the offer document of any mutual fund you see growth and dividend option in it what is this ? |
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RKN
 |
In Growth Options no dividends are declared. Dividend option declares dividend and NAV gets reduced to the extend of dividend declared |
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KKP_Investor
|
Mutual funds come in 2 categories.
Growth funds
Dividend or Income funds.
Then there are Growth and Income funds that do both.
More imp question is what do you want to do with this info. So, let's go there.
If you are young, then you should be looking at Growth Only MF. If you are looking at Income only, then you must be old and close to retirement or in retirement.
If you are middle aged, with kids, then you may want to be in Growth (if you are risk taker) or G+I (if you are NOT a risk taker).
GL
KKP |
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Alim
|
In dividend option the Fund Manager pays you the dividend once declared and the NAV comes down to that extent. In Growth option the dividend is again reinvested in the market.
Growth option is always the best option as you can see your money grow faster and dividend amount is always very less and once it comes to you it is spent very fast. |
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Achha Admi Buddha Admi
 |
Please visit www.icici.com for details |
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Rahul Chopra
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In dividend mutual fund you receive dividend every year and in growth you don't receive dividend every year. |
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himanshu_iiitm
|
There are basically three options available to the investor depending upon the kind of scheme and the company issuing the mutual fund units or in investing jargon called as AMC [Asset Management Company, such as SBI, Prudential etc].
1 > Growth - The NAV appreciates over time. Analogous to the appreciation in the value of a stock.
2 > Dividend - Distributable surplus available with the AMC. This is subjective and there are mutual fund schemes who would skip the didvidend payout during a lean year.
3 > Bonus - You get bonus units. |
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dolly blaine
|
A variation of the price-to-earnings ratio where a stock's value is further evaluated by its projected earnings growth rate and dividend yield.
Calculated as:
Investopedia Says: For stocks that pay a substantial dividend, the PEGY may be an even better measure than PEG. As with the PEG, keep in mind the numbers are based on future projections and, therefore, aren't guaranteed to be accurate. |
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Sudipto B
 |
If appreciation on NAV gets reinvested for further growth its the growth option.
When appreciation on NAV is distributed every year it is the dividend option. |
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ashony
 |
Growth option: The NAV of your units keep growing (similar to appreciation of share price). You only make money when you sell your units. The income will be treated as Capital Gains.
Dividend option: The Mutual Fund may declare a dividend any time. The NAV of your units will fall by the same amount. This is like selling parts of your holding to book profits periodically. Within dividend option there are usually two sub-options: Dividend Payout or Reinvestment. In the latter, dividend amount is used to purchase units of the same fund on your behalf. So your no of units will increase but the NAV will fall. The income is free of tax in your hands but the Mutual Fund pays a "dividend distribution tax" of about 14% for debt oriented mutual funds.
So if you plan to stay invested for more than a year, your income will be tax free under both Growth and Dividend options (for equity oriented mutual funds) since long term capital gains (on an equity oriented mutual fund) are tax free. |
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