Definition of Growth Plan

A growth plan is a variant of mutual fund schemes. As the name suggests, it is a kind of mutual fund with the objective of long term capital growth.

The growth option helps in increasing the Net Asset Value of the fund and the investor is able to receive a high capital gain. Generally, firms that offer such plans do not charge any commission at the reinvestment stage. So dividend plans offer an investor to reinvest their money for compounding, without incurring any brokerage fee.

Points to remember:

• The investor does not receive any dividends.
• This is because when opting for growth plan, you give the right to the company to reinvest all the dividends you receive.
• Dividend plans can stabilize stock prices as they create a push towards long term investment.

Example:
HDFC TOP 200 FUND - Growth, Sundaram Rural India Fund - Growth are some examples of funds which offer Growth plans.