These MF schemes are offering dividends ranging from Rs 1.20 to Rs 14.63 per unit. Do you own any?

Mutual funds often distribute dividends on a predetermined schedule, such as monthly, quarterly, semiannually, or annually. Recently, several mutual fund companies have announced upcoming dividend distributions for their investment products, scheduled for release on September 13, 2024. 

This notification serves as a crucial reminder to investors, indicating that individuals holding positions in these funds as of the specified date will qualify to receive dividends. Dividends represent a significant component of investment returns, enabling investors to participate in the earnings generated by their mutual fund holdings, offering them a tangible reward for their capital commitment.

ICICI Pru Equity & Debt Direct-IDCWH    Open-ended    Rs 1.20
ICICI Pru Equity & Debt-IDCWH    Open-ended    Rs 1.20
ICICI Pru FMCG Direct-IDCW    Open-ended    Rs 8.75
ICICI Pru FMCG-IDCW    Open-ended    Rs 8.75
ITI Balanced Advantage Fund Direct-IDCW    Open-ended    Rs 14.63
ITI Balanced Advantage Fund Reg-IDCW    Open-ended    Rs 13.24

Source: Value Research

Mutual funds calculate dividends as a percentage of the scheme's face value, not the NAV. Dividends can be declared from gains made from selling securities in the portfolio or from current income sources such as interest or dividends.

The frequency of dividend payments is determined by mutual funds and can be daily, monthly, or yearly. Investors have the option to receive dividend distributions when they are issued or reinvest the money by purchasing additional fund shares.

Dividends are considered taxable income and are subject to Dividend Distribution Tax (DDT). Shareholders who own shares on the record date will receive the dividends. Even if shares are bought right before the record date, investors will still receive part of their investment when distributions are paid.

The dividend yield is calculated as the annual dividend per share divided by the current market price of the fund's units.

Returns may differ significantly based on the composition of the fund's underlying assets and the prevailing market conditions at the time of assessment.