I was analysing ICICI Pru Balanced Advantage Fund - Direct plan for investing through SIP. The NAV of different options is as follows:
Growth - 26.09
Div Qtrly - 10.86
Div Monthly - 13.71
Dividend - 18.95
As far I understand, the NAV gets reduced by the dividend declared per unit. Thus more the dividend the less will be its NAV as compared to other options. So why in this case the NAV of monthly option is more than the quarterly option?
- Amar Kumar
A mutual fund may not offer all plan options from the beginning. Funds generally introduce new plan options after some time. These options may or may not start at the same NAV. The monthly dividend option was introduced on April 3, 2013 and the quarterly dividend option began from September 25, 2014. These are the dates of NAV declaration for the first time. This could be the reason behind the difference in NAVs of these options.
NAV of a fund makes no difference to the returns. Ignore NAV while buying a fund. Concentrate on the performance. Read more here: Low NAV doesn't mean Cheaper Fund.
This article was originally published on October 23, 2015.
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