On HDFC Tax Saver Mutual Fund (Growth Plan)?

Question

Hi,

I have invested in HDFC Tax Saver Mutual Fund (growth) six months back for Rs.30000.....I have 164 units.....

Recently I saw that HDFC tax Saver has announced a Dividend of Rs.8 for Tax Saver (Dividend) Plan......

Will that dividend be useful to me???

Will I be getting more units???

Is it applicable only for Tax saver (dividend)???

Regards,

Nithin

Answer 1

For growth plan, dividends is not given. Units remains same. NAV does not change.

For dividend option, dividend is given. NAV reduces.

For dividend reinvestment, dividend is immediately invested in same fund. Nav reduces.

Answer 2

Whenever a company pays dividend, the NAV of the fund is reduced by the corresponding amount (if you have opted for Dividend - Payout). In this particular case the NAV will come down by Rs 8/- but only for DIVDEND PLAN and Not for Growth Plan.

If you have opted for Dividend - Reinvestment then you get the units for that particular amount and your units are increased.

In Growth Case, No Dividend is declared.

Since your is a Growth Plan, hence Dividend is not applicable in your case. Your Units would remain the same, and there would be no dip in the NAV.

Answer 3

Since you have opted for the Growth plan, you will not be getting any dividend.  Instead this dividend will be reflected in the NAV of the fund itself.

But for the dividend plan of this fund, the NAV will come down corresponding to the dividend declared.