ICICI Prudential Mutual Fund has declared payout under its Income Distribution cum Capital Withdrawal (IDCW) option for its Medium-Term Bond Fund following approval by fund trustee, according to a report by Upstox. Investors holding units under the IDCW option may receive payouts as per the date declared, it added.
What is the record date for ICICI Prudential MF’s IDCW option?
The record date, to determine eligible investors for the IDCW payout, has been set as 13 April (Monday), as per the report.
Who is eligible for the ICICI Prudential MF’s IDCW payout?
Notably, only those unitholders whose names are in the records within specified dates will qualify for the payout distribution.
What is the ICICI Prudential MF’s IDCW payout sum?
The report added that ICICI Prudential MF‘s payout under the Quarterly IDCW option, calculated at face value of ₹10 per unit is ₹0.0697 each.
In the Direct Plan, investors are likely to get a little more under the Quarterly IDCW option, at ₹0.0916 for each unit.
IDCW explained: What is the option in a mutual fund?
According to an Angel One blog on the topic, IDCW refers to an investor payout option where unitholders receive a portion of a particular mutual fund‘s income and capital gains as either monthly, quarterly, half-yearly or annual payouts depending on the terms of the fund.
For example, if you own 1,000 units of a mutual fund scheme and the fund declares a dividend of Rs. 2 per unit, you will receive Rs. 2,000 as a dividend.
How does IDCW option differ from growth option in MFs?
While IDCW gives you payouts at intervals, the MF’s growth option reinvests the returns made by the scheme, thereby not allowing periodic payouts. Rather, the amount is reinvested as gives your benefit of compounding over a specific period, a Nippon India MF page explained.
“Selecting growth or income distribution cum capital withdrawal (IDCW) mutual fund options depends on your risk appetite, goals, and income. It is up to you to decide whether these options are suitable for you or not after careful analysis,” it added.
What are Medium-term bond funds?
Medium term bond funds usually invest in debt securities and money market instruments over a period of three to four years, an on average have a return rate of 7-9%. These are often chosen by conservative investors who are looking to meet financial goals over the three-to-four-year period.
ICICI Prudential AMC sets board meeting
Notably, ICICI Prudential Asset Management Company (AMC) said its board of directors will meet on 13 April to consider and approve the audited standalone and consolidated financial results for this quarter and financial year ended 31 March.
The company also indicated that the board would evaluate and potentially recommend a final dividend for the financial year on the same day. The company has also announced a dividend of ₹14.85 per share and has set 21 January as the date for determining eligibility.
Disclaimer: This story is for educational purposes only. We advise investors to check with certified experts before making any investment decisions.