if a mutual fund distributed the profit does it effect the npv of the unit?

If I am understanding your question correctly the answer is yes. When mutual funds pass on dividends and capital gain distributions to share holders it lowers the cost per unit of the fund. Most shareholders have these distributions automatically reinvested so it does not affect the value of your holdings at all. You simply own more shares with a slightly lower cost per share.

Yes it does.

For eg:

Say your fund size is Rs 1000

No of investors - 100

So NAV is Rs 10 (1000/100)

Dividend Distributed - Rs 100 (Rs 1 to each investor)

Now your fund size will be 900

NAV is Rs 9 (900/100)

Investors may/may not re-invest.

Please there are many other charges like admin, tax etc

I hope this clarifies

Best Wishes

VJDS

try www.sebi.com

See if this can help

Indian Financial portal providing information on

- Which shares to buy

- When to buy shares

- When to exit shares

- Which IPO to subscribe and which to ignore

- Which NFO (New Mutual Fund) to enter

http://www.vjondalalstreet.com/

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