Dividend per unit refers to the amount of income distributed to each unit holder of a mutual fund or REIT (Real Estate Investment Trust) from the scheme's distributable surplus. In mutual funds, this is now termed the Income Distribution cum Capital Withdrawal (IDCW) option under SEBI's revised nomenclature. When a dividend is declared, the NAV of the scheme falls by the amount distributed. Investors choosing the IDCW option receive regular payouts, but it is important to understand that these payouts come from the fund's own NAV rather than external earnings—making them different in nature from dividends paid by a company.
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