MUTUAL FUNDS- GROWTH OR DIVIDEND PLAN, WHAT TO CHOOSE 🤔?
While choosing a mutual fund , an investor requires to make a range of choices. Among them, the most puzzling decisions are the ones relating to choosing between growth option or dividend option. An investor needs to make a choice based on their personal needs and financial goals. However, once the investor gains clarity on these aspects, making a choice will seem easy. There is also a dividend reinvestment plan, however, as it is not often used and hence we shall not dwell on the same. It is important to note that NAV of growth and dividend plan is always different. As there is change in NAV, investors might wonder if the schemes are different or same? The scheme is the same and the difference in NAVs is due to the dividend distribution and compounding effect. In both options, the scheme invests in identical securities but the manner of distribution of profit varies. The investment objective, holdings, performance and fund manager, remains the same. Only the manner of delivering...