InvestorQ : How dividend are issued by the mutual fund company & how often they declared?
Siya Saran made post

How dividend are issued by the mutual fund company & how often they declared?

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Shivali Sharma answered.
8 months ago
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Mutual fund companies are those companies that collect money from investors and invest that in various stocks of different companies. Out of these stocks, there are some companies that declare a dividend and some may not declare any dividend. Those companies that declare dividends generally do it on an annual basis, semi-annual basis, quarterly and some even declare dividend on a monthly basis.

The work of mutual funds companies is to collect dividends from these companies and then paying that dividend to the shareholders on the basis of shareholding, i.e. pro-rata basis. Now, sometimes these mutual fund companies pay dividends right after they collect it and sometimes they end up paying all the collected dividend at once or semi-annually.

All mutual fund companies are required to distribute the dividend collected at least once in a year, as per the guidelines by SEBI. So, it is mandatory to pay dividend annually, and any shorter time period could be decided by the fund manager.

Sometimes, the interest that is earned from fixed-income securities in their portfolios is also aggregated and distributed among shareholders on a pro-rata basis and may be shown as dividend income under the statement.

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