Mutual Fund Dividends

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A dividend is allocated as a fixed amount per share, with shareholders receiving dividends in proportion to their shareholding. The quantum of dividend declared or paid shall also be mentioned in Rupees per unit along with the face value of each unit of that scheme and the prevailing NAV at the time of declaration of the dividend. After the payment of dividend to the respective unitholders, the NAV would fall to the extent of payment of dividend per unit of a scheme.

In a Mutual fund there are two options for receiving dividends by the unitholders. They are as follows :
  1. Dividend Payout Option : whereby the quantum of dividend is paid to the respective unitholder.
  2. Dividend Reinvestment Option : whereby the quantum of dividend is again reinvested in purchasing further units of that scheme.