l m trying to figure out what is that mean? pls give me example with numbers !
invested money = 25000
old nav (1yr ago) = 19
latest nav= 16
number of unit held= 1562
1) what happen after 1 year if my plan is growth
2) what happen after 1 year if my plan is dividend

pls give me good & helpfool answer l m new in this field
trying to learn about mutual fund????????

Dividend is a part of the company is profit which it would like to give to its customers who helped them to make this profit (just like a diwali gift by a company management for its employees).

So, it will declare that for eg., they would give a dividend of Rs.3 per unit. Now with 1562 units in ur hand, u will get 1562 x 3 = Rs.4686 as ur profit share (dividend). Ok.

Now if u had invested under dividend option, then they will send u a cheque for Rs.4686 & the story ends. There will be no change in ur NAV or invested amount.

But if u have opted for the growth option, then the company will not pay the dividend amount in cheque but add (reinvest) it in ur mutual fund. That is ur NAV will be increased.

Thats why for the same mutual fund, the NAV will be less for dividend option & more for Growth option.

Latest NAV is 16.

After 1 yr it may come 22

In Growth you will get 22*1562 =Rs.34364

For eg Fund Mngr decide to to give Rs.5 div,u may get 5*1562 =7812

And your NAV Become 22-5 =17

HOpe u understand.

Then after 5 onths, in growth NAv grow up 2 so that 22+2 =24
But in div 17+2 = 9

Hope u understood

Growth plan means the nav would be growing based on the underlying share is value and no amount will be given back to investors in periodic terms by the fund house.

Dividend plan means some of the profit or growth in nav/amount invested is given back to investors in a periodic manner.

Dividend option means that whenever the fund declares a dividend, it will be distributed to the investors, and the corresponding dividend amount will be reduced from the current NAV of the fund.
In Growth option, the dividends are not declared and hence the NAV does not come down, but only grows if the fund performs well