1. Actually an equity mutual fund is a basket of stocks and other investment instruments.
2. Investment in it is subject to market risks like in stocks or any other investment avenues, though in less proportion since it is managed by stock and debt market professionals.
3. Its current investment value is known from its NAV (Net Assets Value), which actually measures the value of net assets invested in it.
4. NAV = (Market Fair Value of investments + receivables + accrued income + other assets - accrued expenses - payables - other liabilities) / outstanding units.
5. Hence, any dividend paid by those companies whose stocks form a part of a mutual fund, are included in its "accrued income" while calculating its NAV.
2. Investment in it is subject to market risks like in stocks or any other investment avenues, though in less proportion since it is managed by stock and debt market professionals.
3. Its current investment value is known from its NAV (Net Assets Value), which actually measures the value of net assets invested in it.
4. NAV = (Market Fair Value of investments + receivables + accrued income + other assets - accrued expenses - payables - other liabilities) / outstanding units.
5. Hence, any dividend paid by those companies whose stocks form a part of a mutual fund, are included in its "accrued income" while calculating its NAV.