What types of options are available to invest in mutual fund schemes?
The options available in a mutual fund scheme are Growth option and dividend option. Under growth option, the dividend is not declared. NAV of unit reflects whatever capital appreciation has occurred in the scheme. Investors who opt for dividend option would receive dividend if there is distributable surplus available as decided by trustees of the scheme. After payout of dividend NAV of the scheme falls by the amount of payout per unit. This dividend is tax free in hands of investor. Investors must indicate the option in their application form.
