My father invested in ICICI Prudential Capital Protection Fund- Growth option. He wants to change it to dividend payout option as he will be retiring this month. How can this be done?
-Kumar Shanu
Switching from growth to dividend plan (and vice-versa) involves a redemption from existing scheme and a fresh purchase in the desired plan. This is so because the growth and dividend plans have different NAV. Dividend plans have lower NAV than growth plans as they pay out the gains while growth plans re-invest the same.
However, Capital Protection Oriented schemes are closed-end. You cannot redeem, and therefore switch, from these schemes before maturity. In order to exit, you can only trade them on the exchange where liquidity is low. Even if you are able to exit through exchange, you won't be able to invest in the dividend option because investments in closed-end schemes can be made only during the NFO.This article was originally published on October 21, 2013.
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