Ask Value Research

Dividend Earnings

Do investors benefit from the dividends a mutual fund receives from the companies it invests in? Find out…

What does an AMC do with the dividend it receives from companies? Do investors benefit in any way from that?
-Mohan Sharma

Yes, investors do benefit. The money that you invest in a mutual fund earns returns from three sources: capital gains, dividends and interest. All of these are reflected in the NAV on a day-to-day basis. So, the dividend which a mutual fund earns on the portfolio they have built with your money, gets back in the portfolio and is reflected in the NAV.

This article was originally published on May 29, 2012.

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