When investing in mutual fund it is asked to invest in growth or divided so which one to select?

You make money in a growth fund because the price of its shares go up (because the price of the shares of the companies the fund owns goes up). You don't get anything else. This is known as capital appreciation.

The something else is dividends. That's money a company pays to its stockholders as a reward for owning the stock. A "value" fund or an "equity income" fund will pay dividends. Of course, the shares of these funds may also go up and so you can get both capital appreciation and income from the dividends.

Generally, younger investors go for growth funds and older investors, who already have accumulated assets and are looking for slower, less volatile growth, will go for the dividend-paying funds.

First you have to undertsand both the terminology.

Here is difference between growth and didivdent option.

GROWTH:- Here as name says your investment grows up and finally you will get cumulative money at the end of redemption. here your money grows because your gain from your investment is with fund house and they are reinvesting in the market. This way NAV of GROWTH option goes-up further and finally, at the time of redemption you will get lump-sum amount in return to your actual investment.

DIVIDEND:- This option is like MONEY BACK mutual fund where in whatever gain investment house has made till date of dividend declaration, is giving back to the investors. This is called DIVIDEND. Dividend payout period is not fixed. It can be declared anytime by the investment house. After dividend is given to investors, NAV of that particular mutual fund gets down. Again when it goes up, dividend is declared and again NAV gets down. This cycle goes on.

Now, Which option to select?
If you want lumpsum amount in return, you should opt for GROWTH option.
If you want money back at periodical intervals, you should opt for DIVIDEND option.

I suggest if you are having sufficient fund to invest then do not go MORE for dividend option. I mean to say if you are investing in 10 MF's then allocate only 2 MF's for DIVIDEND option else all for GROWTH option.

if you have more queries, pls do write me a mail at jigs230678@rediffmail.com.

Njoy Investing :-)

both are good. but "growth" is better because the dividend u get is reinvested by buying units.

If u have need of money during ur investment, u can choose dividend option, Otherwise choose growth option.This option[ growth] will increase ur investment value......................................



if u invest in mutual funds , there r better chances for u to get good returns.some tips while investing in mutual funds are as follows.............
1.Be a regular investor
2. Be patient, give time to ur investment to be fruitful.Hold it for a particular time.
3.Find out a good fund. For this take a help from a professional amfi certified distributer.
4. Diversify ur investment. Don't put ur all eggs in one basket.
5. Expect practical return from ur investment.Don't overestimate it.
5. Invest ur money in different funds.

If u have any more query, feel free to call me. My no is 9891354018[delhi]. My name is abhishek.