2 replies on this article “Different plans of a MF”

1. Ashal Jauhari says:

   March 22, 2013 at 12:28 pm

   Dear Suman, the statement is true for all the variants mentioned by you. the only important thing is for dividend option, the amount is considered reinvested in the scheme.

   In case of Growth option, the NAV keeps on increasing. In case of dividend option, the periodic profit booking is distributed in the form of dividend among the unit holders. The NAV ‘ll come down. If you get the amount, as the money is no longer with the fund, your effective return ‘ll come down. if you do not receive the dividend & reinvest the same, as the money is back with the fund, the final return to you ‘ll be same as growth option. New Units ‘ll be allotted to you against the dividend reinvestment, hence total no. of units ‘ll increase. Bonus option is again a mode of profit booking but here the money is reinvested in the fund & you receive more units but be it dividend reinvestment or bonus option, the basic value of your investment on the date of reinvestment ‘ll remain same.

   So in a sense, the return from all the variants ‘ll remain same if money is there with the fund.

   Thanks

   Ashal

   Reply
2. Free Financial Calculators says:

   March 22, 2013 at 12:18 pm

   once should specifically mention which plan (retail/direct etc.) is performing well

   Institutional vs Regular Plans

   http://www.valueresearchonline.com/story/h2_storyView.asp?str=8969

   direct: no trail commissions to agents deducted
   regular deducted.

   growth: units purchased are untouched until redemption
   dividend’ some units paid out as dividend from time to time

   bonus: reshuffling units and nav leaving total value intact but short and long term capital gains will differ before and after bonus!

   Reply

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