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The benefits of investing in mutual funds include diversification, high liquidity, high returns and professional asset management services to reduce the risk of loss. As a result these are good return or income generating investment options with low risk, especially for those looking to save for their retirement years.
Now, there are different types of schemes like Equity, Debt, Gilt, Value Stocks, Growth Schemes, Open ended schemes, Close ended funds etc. So it can be very confusing for novice investors. In this article we will discuss the benefits of mutual funds that pay dividends to their investors. In such investments, a portion of the profits made through investments are distributed among investors periodically when the fund declares dividends. When a scheme declares dividend out of the profits earned, the size of the fund also reduces and consequently the Net Value Asset or NAV also falls. Then why should investors choose dividend paying funds? Many new investors are also attracted to the fund when dividend is declared. Moreover, the dividend generated from equity mutual funds is tax free. There is no dividend distribution tax and long term capital gains are also tax free.
UTI is a trustworthy organization with many years under its belt. Many of its schemes have declared dividends. Here are some funds where you can invest if you want to rake in dividends.
- UTI Pharma & Healthcare Fund – Dividend declared at Rs.1.7/unit and record date is October 28, 2010.
- UTI Transportation & Logistics Fund (G) – Dividend declared at Rs.2.00/unit and record date is October 6, 2010.
- UTI Mastershare (G) – Dividend declared at Rs.3.00/unit and record date is November 15, 2010.
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