Exposed: The Myths of Mutual Funds
By SiliconIndia
BENGALURU: Many investors across the globe have benefitted from the offers of the Mutual Funds. Investing in Mutual Funds is seen as a popular option among many but there are still many misconceptions prevailing about them.
These myths prevent investors especially the common people, from investing in MFs and they are staying away from the array of benefits which come from investing in MFs. Let us have a look at the list of myths we try to bust below as compiled by HDFC Fund.
# Dividends is an extra income. Schemes that pay dividends are better
When a Mutual Fund announces dividend, the NAV is adjusted accordingly. When you choose dividend option, a part of the profits made by the scheme is distributed to investors and later the dividend is subtracted from the NAV of the scheme on the record date.
But you need to remember that when a dividend is declared, a lot of new investors will put their money in the mutual fund with the intention of getting the dividend but it might not be a better option considered if there are better schemes available
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