Growth or dividend: which option should you choose?

mutual funds: income and dividend

Level - BASIC

Mutual funds allow investors to choose between the dividend and growth option, but dividends and capital gains are taxed differently in the hands of the investor. Watch this video to understand why the choice between the two options should be based on investor needs, type of fund and tax considerations.

AUTHOR(S): Uma Shashikant


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    1.Prabodh has invested in a fund since last one year. The fund is posting good returns, however, he has not earned any dividend. Which of the following is NOT likely to be true?

  • the fund has not performed well
  • the fund has chosen not to declare dividend
  • He has invested in the growth option
  • 2.What happens to the NAV when a fund pays out a dividend?

  • There is no change in the NAV
  • NAV rises to the extent of the dividend
  • NAV falls to the extent of the dividend
  • 3.Which of the following is "NOT" a source of income for an investor in a mutual fund?

  • Dividend
  • Interest
  • Capital gain
Sponsor Name : NCFE
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