When you are interested in making investments in mutual funds, you have to decide between growth and income. Before you pick monthly dividends or mutual funds with focus on growth only, you have to make sure that you know pros and cons of each.

With mutual funds providing monthly dividends, you will have the money in the present. When you choose these funds, you do not have to rely on the future promises, as is the case with mutual funds focusing on growth only. The growth mutual funds do not pay any monthly dividends. Even if some of them pay something on monthly basis, it will be extremely low.
With monthly dividend option, you will have the chance to increase your ownership shares. Therefore, more shares will be added to your portfolio with time. You can benefit even more when the prices are down due to market decline. Therefore, investing with mutual funds giving monthly dividends seems a wiser choice since it increases ownership shares and provides monthly benefits as well.

You will also get some relief on tax when you hold dividends for more than one year. These dividends will be charged on capital gains tax and not income tax. The capital gains tax is always lower than the income tax hence giving you some more advantages.

If you look at the history of market, you will realize that dividends have good value historically. An overall estimation of the investments in mutual funds clearly shows that dividends have made most profits and hence the market gains. Therefore, if you invest in dividends, you are naturally on a more favorable soil.

Finally, the stocks with dividends will increase in value most of the times. The share value will increase over time when the company is going in the right direction. Holding dividends with such company will certainly bring you more returns with time.