Where to see the mutual fund dividends and the scheme returns

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Generally mutual fund research websites show returns of growth option only. The reason being that the fund portfolio is same for the growth as well as the dividend option. Dividend and growth options are chosen by investors depending upon their investment needs. For example – if someone is young and wanting to invest for long term wealth creation, he should choose growth option. Whereas in your case, you should invest in dividend payout option as you are looking for regular returns from your investments in mutual funds.

As the scheme portfolio is same irrespective of the option chosen by the investor the returns would also be same. However, as the dividends are paid out in case of dividend payout option the NAV falls upto the extent of dividend declared on the next day and therefore, your absolute return goes down by that extent. For example – A scheme NAV for both the options today is Rs 12.00 and you have invested Rs 100,000 at the NFO (units allotted are 100,000 / 10 = 10,000 units). The fund pays it first dividend of Rs 1.00 per unit when the NAV is Rs 12, therefore you will get a dividend of Rs 10,000 (Units 10,000 x Re 1 per unit). Next day the scheme dividend option NAV would be Rs 11 (Rs 12 – Re 1 dividend declared) and your investment value would be Rs 110,000 . Therefore, your absolute return will be 10% post receiving the dividend.

Whereas in case of growth option, the absolute return will be 20% as the NAV does not fall as no dividends are declared. Simply speaking, you are booking profits periodically by taking the dividends.

Therefore, while deciding the scheme selection check the fund performance of growth option which is commonly available along with other parameters. Once you are able to select the right funds, do invest in the dividend payout option (as that is your preferred option).

Hope we could make it clear to you.

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