FAQs

Mutual Funds

11 Jan 2019

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To cater to different investment needs, Mutual Funds offer various investment plans. Some of the important investment plans include:
Growth Option: Dividend is not paid-out under a Growth Plan and the investor realizes only the capital appreciation on the investment (by an increase in NAV).
Dividend Payout Option: Dividends are paid out to investors under a Dividend Payout Option. However, the NAV of the mutual fund scheme falls to the extent of the dividend payout.
Dividend Re-investment Plan: Here the dividend accrued on mutual funds is automatically re-invested in purchasing additional units in open-ended funds. In most cases, mutual funds offer the investor an option of collecting dividends or re-investing the same.
Retirement Pension Plan: Some schemes are linked with the retirement pension. Individuals participate in these plans for themselves, and corporates participate for their employees.
Insurance Plan: Certain Funds offer some schemes that offer insurance cover to investors.
Systematic Investment Plan (SIP): Here the investor is given the option of preparing a pre-determined number of post-dated cheques (or a direct debit of the bank account) in favor of the fund. The investor is allotted units on a pre-determined date specified in the Offer Document at the applicable NAV. : As opposed to the Systematic Investment Plan, the Systematic Encashment Plan allows the investor the facility to withdraw a pre-determined amount/units from his fund at a pre-determined interval. The investor's units will be redeemed at the applicable NAV as on that day.

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