I am confused between the growth and dividend option when investing in a mutual fund. Which is better?
Rajesh Gopalan, Chennai
In the growth option of a fund, all the profits of the fund are invested back into the scheme. This is reflected in the fund’s net asset value (NAV). In the dividend option, profits made by the scheme are distributed in the form of dividends from time to time. Both the options have relative benefits which depend on your expectation and needs from the investment. For instance, if you are looking for regular income from your investment; go for the dividend option, else stick to growth option for long-term wealth creation.
