POSTED BY July 12, 2012 12:16 pm COMMENTS (9)ON
Why do mutual-funds have dividend-payout-option? Why not just have the growth-option?
I have heard the argument about getting to see the ‘colour of money’ on a periodic basis in dividend-payout-option. However, if that is the intention, one can get it as well by selling a certain number of units from growth-plan.
While selling X-units from a growth-plan, the investor is in complete control about how much money (s)he wants to realize. In a dividend-payout-option, the investor is at complete mercy of the AMC regarding the quantum of dividend-declared.
I do want to know the rationale of investing in dividend-payout-option of mutual-funds.