Follow the value, not just the cash message
Illustrative example: you hold 100 units at a NAV of ₹20, worth ₹2,000. Assume a ₹1-per-unit payout, no market movement and no taxes or other adjustments. You receive ₹100, while the simplified post-distribution NAV is ₹19.
Your remaining units are worth ₹1,900. Adding the ₹100 cash gives the same ₹2,000 before the excluded effects. The payout announcement alone has not created a ₹100 gain. Real NAV movements also reflect the market and the scheme’s accounting.
Why the full option name matters
Growth and distribution options should not be compared by their ending NAV alone. A distribution option may have paid out value during the observation window. A growth option retains value within the scheme rather than making those distributions.
A reinvestment choice changes how a distribution is received; it does not turn the distribution into a guaranteed bonus. Read the option and payout or reinvestment designation on the statement instead of relying on a shortened product label.
The question to ask next
Ask whether the return comparison accounts for all distributions and their dates. Then separate product performance from the timing and treatment of cash you received.
Distribution amounts and frequency are not assured. Scheme documents describe the terms, and current tax rules can affect the personal result. This guide explains the value transfer; it does not select an option for a particular investor.