Hi Investors,
I would like to know a basic difference between Growth and Dividend options in mutual funds.
I have the basic idea that Growth is for long term investment and Dividend option is for income at short intervals. Lets take a example of buying 100 shares of Growth and Dividend both of say X mutual fund.
100 * 10(NAV) on 15th July = 1000 Rs (Growth)
100 * 5 (NAV) on 15th July = 500 Rs (dividend)
Now after a year
100 * 14(NAV after an year) on 15th July 2017 = 1400 Rs
100 * 6 (NAV after an year) on 15th July 2015 = 600 Rs
I plan to sell off my units for both Dividend and Growth option now the Profit I should be expecting is the total NAV amount for both Growth as well as Dividend units(+any dividend paid in 1 year).
Basically the NAV of Dividend option increases is also in my profit right?Whenever I plan to sell, It would be my profit whatever the current NAV is in dividend option apart from the dividend paid?![Eek! :eek: :eek:](data:image/gif;base64,R0lGODlhAQABAIAAAAAAAP///yH5BAEAAAAALAAAAAABAAEAAAIBRAA7)
Kindly help.
I would like to know a basic difference between Growth and Dividend options in mutual funds.
I have the basic idea that Growth is for long term investment and Dividend option is for income at short intervals. Lets take a example of buying 100 shares of Growth and Dividend both of say X mutual fund.
100 * 10(NAV) on 15th July = 1000 Rs (Growth)
100 * 5 (NAV) on 15th July = 500 Rs (dividend)
Now after a year
100 * 14(NAV after an year) on 15th July 2017 = 1400 Rs
100 * 6 (NAV after an year) on 15th July 2015 = 600 Rs
I plan to sell off my units for both Dividend and Growth option now the Profit I should be expecting is the total NAV amount for both Growth as well as Dividend units(+any dividend paid in 1 year).
Basically the NAV of Dividend option increases is also in my profit right?Whenever I plan to sell, It would be my profit whatever the current NAV is in dividend option apart from the dividend paid?
Kindly help.