How is the income earned from mutual fund investments distributed?
The income earned by the investments of the scheme, net of recurring expenses, subject to a maximum ceiling of 2.5% in equity schemes and 2.25% in debt schemes, is shared by way of dividends or capital gains by the unitholders of the scheme proportionately. These recurring expenses include asset management fees not exceeding 1.25%, it also is due to other expenses such as Trustee Fees, Registrar Fees and Marketing expenses etc. Capital Gain: Capital gain is the profit, which you earn if you sell the units at a high NAV than the original cost. Units held for more than 12 months and sold thereafter will attract Long Term Capital Gains while units that are held for less than 12 months will attract Short Term Capital Gains tax. Dividend: When a fund makes a profit on its investments, this profit may be in form of dividends. You can either invest your dividend in the fund or receive it in the form of cash. But mutual funds only invest in stock markets. And I do not want to be exposed to the
