A mutual fund has two plans - dividend plan and growth plan. If the NAV of the dividend plan is lower than that of the growth plan, is it a good option to transfer my investments to the dividend plan?
- Sunil
The NAV of the dividend plan of a mutual fund is lower than the NAV of the growth plan because the former pays out a dividend to the investors. In the growth plan, all the returns earned keep accumulating in the fund. Moving your money from one plan to another, either way, is not going to impact your returns in any way, because the fund remains the same and your money is invested in exactly the same manner in both plans.
This article was originally published on February 07, 2013.
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