MUMBAI: The dividend option in equity and balanced mutual funds is fast losing popularity among investors. Bhansali is asking all his investors, who have completed more than a year to switch from dividend options to growth options. “Dividend payment is in the control of the fund house and many investors do not even use the entire dividend as cash flows. SWP gives investors the power to withdraw only the amount they need and hence is a better option,” says Anup Bhaiya, MD, Money Honey Financial Services.Wealth planners are recommending those investors in the dividend reinvestment option too to switch to the growth option. Even though the percentage of tax on capital gains is the same as dividend, your eventual returns will be severely impacted because the dividend tax constantly reduces the amount available for further growth,” says Dhirendra Kumar, chief executive officer, Value Research.

Source: Economic Times April 23, 2018 03:11 UTC