Mutual Funds Investing : Dividend or Growth option ? Which one to choose?

[jiten702]

Selecting either dividend or growth option entirely depends on investment objective and profile of investor.

If an investor wants a regular income through his investment in form of dividend then he can go for dividend option but one thing has to be remembered that dividend is not guaranteed and regular. If a fund house has declared 20% dividend in a scheme last year that does not mean dividend will be declared under the same scheme this year as well and quantum of dividend also varies year after year.

But if an investor is looking for wealth creation by investing for long period of time then growth option can be an ideal as profit generated by fund remains within the scheme and NAV keep growing over a period of time.

So,opt for dividend option if you are looking for regular income from your investment otherwise opt for growth option to build long term wealth and take advantage of power of compounding.

So Whether to go for dividend option or growth option depends on every investor's investment horizon, risk taking capability and objective.