Ch.5 · SID, SAI and KIM Documents · medium
What is 'IDCW reinvestment' option in mutual fund schemes?
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EXPLANATION
In the IDCW Reinvestment option, the declared distribution is not paid out in cash but is used to purchase additional units in the same scheme at the ex-IDCW NAV. This allows investors to benefit from compounding without managing the dividend payout. Tax is still applicable on the distribution even though it is reinvested.
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