Growth Plan

A growth plan is a category of mutual fund schemes specially designed for long-term capital growth. From its name, it is clear that its basic goal is to raise the Net Asset Value (NAV) of the fund in the form of huge capital gains to investors. This plan is best for those who want to build their wealth in the long term.

Key Characteristics of a Growth Plan

The growth option in a mutual fund scheme helps to increase the Net Asset Value (NAV) of the fund, allowing investors to receive high capital gains. Growth schemes also do not require commission payment during the reinvestment period. This means that investors enjoy the freedom of reinvesting their dividends without any brokerage cost; thus, their investment gets compounded. Some of the basics to understand about growth schemes are:

1. No dividend payment: There is no payment of dividends if a growth plan is chosen.
2. Reinvestment of dividends: All dividends earned while an investor purchases a growth plan can be reinvested by the company freely.
3. Long-term investment policy: Growth plans promote long-term investment, and investments made via such plans stabilize the share price.

Advantages and Examples of a Growth Plan

Growth plans have several advantages, including the ability to generate high capital appreciation and compounding returns. By reinvesting dividends, investors can harness the compounding effect, which makes their investments grow and multiply in the long run. A few mutual fund schemes with growth plans are HDFC TOP 200 FUND – Growth and Sundaram Rural India Fund – Growth. These schemes can be utilized to create long-term capital appreciation and wealth creation.

Conclusion

Investment in a growth plan allows investors to benefit from high capital gains and stabilize share prices. With its merits and advantages, a growth plan is one of the favourite choices of investors who want to grow their wealth in the long term. To start investing in a growth plan and potentially boost your returns, open an account with Religare Broking today and discover the ease and convenience of online trading.