Multiple choice

A scheme's policy on dividends and distribution

  1. is decided by the fund manager as per the market outlook

  2. can be changed to suit the requirements of the AMC

  3. need not be consistent

  4. should be disclosed at the time of initial launch
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

A mutual fund scheme's dividend and distribution policy must be clearly disclosed in the offer document at the time of its initial launch. This ensures transparency for investors from the outset. The policy cannot be changed arbitrarily by the fund manager or AMC and must be consistent as disclosed.

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