Dividends option in ELSS

[varunuppal]

Hi all,

I want to know -
1- How dividend is paid out in ELSS schemes (dividend option)?
2- Which option is good for ELSS - Dividend option or Dividend Reinvestment Option?

Thanks,
Varun

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[Matrix]

1- How dividend is paid out in ELSS schemes (dividend option)?

Say you have 1000 units at NAV Rs. 100 and if AMC declares 50% dividend then you will get -
Dividend = 50% * (No. of units) * (initial face value of the fund unit, It's generally Rs.10)
Dividend = 50% * (1000) * (10)
= 5,000

2- Which option is good for ELSS - Dividend option or Dividend Reinvestment Option?

Its upto you what you want. I go for dividend option. Its good if you get money early.

[CONFUSED]

2- Which option is good for ELSS - Dividend option or Dividend Reinvestment Option?

Both the options are good. If you want to create wealth use second option, As discussed multiple times, MFs are long term investment.

[vijaygawde]

I won't agree with you on this - Confused. If a fund is not performing and you have opted for dividend reinvestment option, the dividend is gone same way. But if dividend payout option is there, you can invest the same in some good fund. And the most important point - you get money at periodic intervals in dividend payout option.