Investing Basics – Feel free to ask the most basic questions

I found this from the NIFTYBEES scheme document:

The income received by way of Dividend shall be used for recurring expenses and Redemption requirements, or shall be accumulated and invested as per the investment objective of the Scheme. There is a risk of higher Tracking Error due to the income received by way of Dividend till it is reinvested. The expectation is that, over a period of time, the Tracking Error of the Scheme relative to the performance of the underlying index will be relatively low.

In short, dividends received by this ETF is used for expenses, redemptions, etc. The remaining dividends are accumulated and reinvested, keeping the tracking error in mind.