Ask Value Research

Growth Or Dividend

In terms of returns, there is no difference between a fund's growth & dividend re-investment option…

Can you explain the difference between growth and dividend re-investment option? Which is better?
- Y Khan

Often, dividends are perceived to indicate a fund’s performance. This is not true, as dividends are deductions from your fund account. In a growth option, this same money would be added to your account, as against passing it on to you in the form of dividends. Hence, in terms of returns, there is no difference between the growth and dividend re-investment option when investing in a fund.

This article was originally published on June 01, 2011.

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