What is difference between growth and dividend plan?

The only difference is that, profits are re-invested in growth option and distributed in dividend option. The NAV of growth option will always be higher than the dividend option because the profits re-invested in the growth option may grow in value over time.

What is the difference between growth plan and dividend reinvestment plan?

With a growth option, the investor lets the fund company invest the dividend payments in more securities and ultimately grow their money. With dividend reinvestments, fund managers are allowed to use dividend payments to buy more shares in the fund on behalf of the investor.

What is difference between growth and direct growth?

“Direct growth” means investing in growth option of a scheme through a direct plan, while “Growth” means investing in growth option of a scheme through a regular plan. Needless to say the expense ratio of “Direct Growth” will be lower than “Growth”.

What is difference between dividend payout and dividend reinvestment?

Dividend Payout Plan: In this plan, the fund declares dividends out of profits. However, in the dividend reinvestment plan the mutual fund buys units to the extent of the dividend declared by the fund at the post-dividend NAV and credits units to the account. Understanding the 3 plans with a live illustration..

How does NAV increase value?

The NAV (on a per-share basis) represents the price at which investors can buy or sell units of the fund. When the value of the securities in the fund increases, the NAV increases. When the value of the securities in the fund decreases, the NAV decreases.

What is NAV value in mutual funds?

Net asset value (NAV) represents a fund’s per share market value. NAV is calculated by dividing the total value of all the cash and securities in a fund’s portfolio, minus any liabilities, by the number of outstanding shares. The NAV calculation is important because it tells us how much one share of the fund is worth.

Is higher or lower NAV better?

Yes, a lower NAV would give you more units, and a higher NAV would put lesser number of units in your hand, but remember the value of your investment in both cases would be same. Both schemes are the same kind and you invest Rs 9,000 in both.

What is the difference between growth plan and direct plan?

What is the difference between growth and direct growth? Growth means investing in growth option through a regular plan, while direct growth means investing in growth option scheme through a direct plan.

What is the difference between direct growth and direct dividend?

Essentially, the difference is quite simple. In a growth plan, the fund does not payout anything to the investors by way of regular payouts. On the other hand, the dividend plan pays dividends out of profits earned and income generated. Remember, a fund is not permitted to pay dividend out of capital.