HDFC Mutual Fund announces IDCW payout in Arbitrage Fund; May 19 set as record date

According to the notice issued by HDFC Trustee Company Ltd., the trustee of HDFC Mutual Fund, the IDCW distribution has been approved for various plans and options of the open-ended arbitrage scheme. Investors holding units in the eligible IDCW options as of the record date will qualify to receive the payout.

The quantum of IDCW has been declared at Rs 0.050 per unit on the face value of Rs 10. The payout will apply to the following options:

• Wholesale Plan – Regular Plan – Normal IDCW Option (Payout and Reinvestment)

• Wholesale Plan – Direct Plan – Normal IDCW Option (Payout and Reinvestment)

• Wholesale Plan – Regular Plan – Monthly IDCW Option (Payout and Reinvestment)

• Wholesale Plan – Direct Plan – Monthly IDCW Option (Payout and Reinvestment)

The HDFC Arbitrage Fund is an open-ended scheme that primarily invests in arbitrage opportunities across equity and derivatives markets. Arbitrage funds are generally considered relatively low-risk compared to pure equity funds because they aim to benefit from price differences between cash and futures markets.

Under the IDCW payout option, investors receive periodic distributions from the scheme’s distributable surplus.

Mutual fund schemes offer two primary IDCW options for investors

In this plan, the mutual fund distributes the accumulated profits to investors at regular intervals. Once the distribution is made, the net asset value (NAV) of the fund decreases by the amount of the payout.

Instead of receiving the payout in cash, the profits are reinvested back into the mutual fund, purchasing additional units for the investor. This increases the number of units the investor holds, while the NAV of the fund reduces by the payout amount.

Disclaimer: The information contained in this article is for informational purposes only and does not represent investment advice from Upstox. Investment decisions should be made based on independent research or consultation with a registered financial advisor. Past performance is not indicative of future results.