Please could you let me know what happens to the Net Asset Value (NAV) of the growth scheme when the fund declares dividend under the dividend scheme?
- Binay Gupta
You seem a bit confused. Nothing happens to the Net Asset Value (NAV) of the growth option because it got nothing to do with the dividend declared under the dividend option. The NAV of the dividend option falls once the dividend is declared. When you choose the growth option, all profits of the scheme are invested back into the scheme. The growth of your investment will be reflected in the higher NAV of the scheme. The dividend option offers a part of your investment back to you. When a fund declares dividend, the NAV of the scheme goes down proportionately.