Sharad Rokade asks if he would receive dividend if he has invested a day prior to the dividend declaration date
04-Mar-2009 •Research Desk
Franklin India Blue Chip Fund (Dividend) announced a 30% dividend on January 15, 2009. If I invest in the same fund on January 14, 2009 can I get 30% dividend? If the amount invested was Rs 2 lakh what amount will I get as dividend?
Dividends are paid to those unit holders whose hold units of the fund's dividend option, as at the close of the business hours on the record date.
There is a difference between record date and dividend declaration date. The dividend option of the Franklin India Bluechip fund declared a 30% dividend on January 15, 2009 (which is the dividend declaration date) and fixed January 21, 2009 as the record date. So any person who held the units on the record date will be eligible to receive the dividend. Since you have entered the fund before the record date and assuming that you were invested in the fund on the record date i.e. January 21, you are eligible for the dividend.
The dividend is always declared as a percentage of the face value of the fund's units. A 30% dividend on the face value of Rs 10 per unit implies Rs 3/- dividend on each unit. Assuming that you invested Rs 2 lakh on January 14, 2009 without any entry load, the number of units comes to 8048 as the NAV on that day was Rs 24.85. Now for a 30% dividend which comes out as Rs 3 per unit, you would get Rs 24, 144.