When investing in a mutual fund should I opt for dividend or growth plan? I am planning to invest in UTI Retirement Benefit Pension Fund; is it a good investment?
- Sanjay Desai
Going by the investment yield or returns, there is no difference between the dividend or growth option when investing in mutual funds. There are however tax implications which depends on the type of fund—equity or debt. However, with the direct tax code (DTC) just ten months to go, you will be better of being in the growth option as under the DTC dividends will be taxed.
As for UTI Retirement Benefit Pension fund, it is a three star rated fund and is balanced fund with a maximum equity allocation of 40 per cent. This allocation ensures to provide pension to investors particularly self-employed persons after they attain the age of 50 years, in the form of periodical cash flow up to the extent of repurchase value of their holding through a systematic withdrawal plan. This fund has not been performing consistently in recent years, which is reflected in its varying performance. One can instead consider investing in BSL Asset Allocation Moderate fund, which is the best performing fund in the category.