Is investing in the dividend options more profitable or more tax-saving than the growth option?
When your fund pays out a dividend all it has done is – paid out the gains it has generated instead of accumulating it. Moreover, any dividend paid means that the fund pool is smaller by the amount of the payout and this is reflected in the lower NAV. Had the fund not paid the dividend, it would have been reflected in the higher NAV of the fund and as a result the value of the units held by you would have appreciated which you would have realised on redemption.
