Ex-dividend date

When a Mutual Fund scheme declares dividend, the NAV of the scheme falls to the extent the amount of dividend was declared on the next business day, when the units of the scheme are available for trading in the market. The day when the NAV of the scheme falls by the same amount as the amount of dividend declared or capital gain distributed to investors, is called the Ex-Dividend Date.

If the NAV of a Mutual Fund scheme is ` 200 before the dividend was declared and the scheme declares a dividend of ` 20 per unit, the NAV of the scheme will fall to ` 180 on the ex-dividend date i.e. the day on which the scheme will start trading in the market at a NAV of ` 180.