The ex-dividend date in mutual funds is the date when the fund's Net Asset Value (NAV) drops because a dividend is being paid. If you buy mutual fund units on or after this date, you will not get the dividend. Only investors who hold units before the ex-dividend date are eligible to receive the dividend. This date is important if you are looking to earn regular income from dividends or planning to buy or sell units.

What Does Ex-Dividend Date Mean in Mutual Funds?

Ex-dividend date is the day when the mutual fund's NAV becomes lower because it is about to pay a dividend. If you invest before this date, you will receive the dividend. But if you invest on or after the ex-dividend date, you will not get the dividend. This date helps you know if you are eligible for the dividend or not.

Why Is the Ex-Dividend Date Important for Investors?

The ex-dividend date is important because it tells you if you will receive the dividend or not. If you want to earn income from mutual fund dividends, you must buy units before this date. If you miss it, you will not get any dividend. It helps in planning your buying or selling of mutual fund units.

How Does NAV Change on the Ex-Dividend Date?

On the ex-dividend date, the NAV of the mutual fund falls by the amount of dividend declared. For example, if the NAV was ₹100 and the fund declared ₹2 dividend, the NAV becomes ₹98 on the ex-dividend date. This drop shows that the dividend has been paid out to investors who held units before the ex-dividend date.

Who Gets the Dividend in Mutual Funds?

Only those investors who hold mutual fund units before the ex-dividend date will receive the dividend. If you buy units on or after the ex-dividend date, you will not get the dividend. The fund company uses the ex-dividend date to decide who is eligible to receive the payout.

Can You Buy Mutual Funds Before Ex-Dividend Date to Earn Dividends?

Yes, if you buy mutual fund units before the ex-dividend date, you will be eligible for the dividend. But keep in mind that after the dividend is paid, the NAV drops. So, while you receive a dividend, your overall investment value stays almost the same. This strategy is good for regular income but not for quick profits.

Is It Good to Invest Just Before the Ex-Dividend Date?

Investing just before the ex-dividend date may give you a dividend, but the NAV of your fund will fall by the same amount. So, your total value doesn’t increase much. It’s better to invest in mutual funds based on your goals, not just for short-term dividend gains. Long-term growth should be the main focus.