Divided paying mutual funds

Top 5 divided paying mutual funds. All you need to know

Dividend-paying mutual funds are one of the types of mutual funds in India that invest in equity and equity-related instruments that can yield a high dividend to its shareholders.

These companies have strong fundamentals as they are profit-making companies. Only profit-making companies can distribute the dividend to their shareholders.

Having said that the primary intention of these companies is to provide regular income and capital appreciation to their investors.

As per SEBI (Securities and Exchange Board of India) norms, a dividend yield fund invests at least 65% of its portfolio in dividend-yielding instruments.

Advantages:

  1. These funds have the potential to regular income through dividends.
  2. These funds invest majorly in strong companies having strong fundamentals.
  3. These funds provide equity exposure with lower risk.

Top 5 Dividend paying mutual funds

S.No.Fund Name3-Yr Annualized Performance
1Templeton India Equity Income Fund Direct Payout of Inc Dist cum Cap Wdrl22.43 %
2IDBI Dividend Yield Fund Direct Payout of Income Distribution cum Cap Wdrl18.83 %
3Sundaram Dividend Yield Fund – Direct Plan Half Yearly Payout of Income Dis cum Cap Wdrl18.59 %
4Aditya Birla Sun Life Dividend Yield Fund Direct Plan Payout Inc Dist cum Cap Wdrl17.44 %
5ICICI Prudential Dividend Yield Equity Fund Direct Payout Inc Dist cum Cap Wdrl17.30 %
Note: Data as of July 26, 2022
Source: Morningstar

Templeton India equity income fund direct payout of inc dist cum cap wdrl

Fund analysis:

The scheme seeks to provide a combination of regular income and long-term capital appreciation by investing primarily in stocks that have a current or potentially attractive dividend yield, by using a value strategy.

The fund has outperformed the category average over different tailing period returns. The fund has invested majorly in large-cap companies (81.41%) followed by mid-cap (17.77%) and small-cap companies (0.82%).

ProsCons
Attractive risk-to-reward ratio. Fund has outperformed the category average when the market was falling & rising.High volatility than the category average.

Idbi dividend yield fund direct payout of income distribution cum cap wdrl

Fund analysis:

The fund’s aim is to provide capital appreciation and/or dividend distribution by investing predominantly in dividend-yielding equity and equity-related instruments.

The fund has a beta of 0.78 indicating that the fund performance is less relative to the market. The fund follows a blended style of investing which means that the fund has invested in both value and growth stocks. The fund has outperformed the category average marginally.

ProsCons
Less volatile than the category average. Fund has outperformed the category average when the market was falling.Fund has underperformed the category average when the market was rising.

Sundaram dividend yield fund – direct plan half yearly payout of income dis cum cap wdrl

Fund analysis:

The fund has given consistent performance over the long-term period. The fund has a well-diversified portfolio, spread across sectors except for real estate.

The fund has invested across market capitalization companies i.e., large-cap (84.79%), mid-cap (13.42%), and small-cap (1.79%) companies. The fund has also invested some portion in the debt category also.

ProsCons
Fund has outperformed the category average when the market was falling. Well-diversified portfolio.High expense ratio.

Read more: Top 10 large cap mutual funds in India

Aditya Birla sun life dividend yield fund direct plan payout inc dist cum cap wdrl

Fund analysis:

The fund has a beta of 0.91 indicating that the fund’s performance is closely related to the performance of the market.

The fund has invested across market capitalization, but the major investments are in large-cap (60.07%) followed by mid-cap (26.37%) and small-cap (13.55%) companies. The fund has a high risk (measured by
standard deviation) than the category average.

ProsCons
Well-diversified portfolio. Fund has outperformed the category average when the market was rising.High expense ratio.

Read more: Top 10 ELSS mutual funds in India

ICICI prudential dividend yield equity fund direct payout inc dist cum cap wdrl

Fund analysis:

The fund’s objective is to provide medium to long-term capital gains and/or dividend distribution by predominantly investing in a well-diversified portfolio of equity and equity-related instruments of dividend-yielding companies.

The fund has given reasonably good performance over the period. The fund follows a blended style of investing, which means that the fund has invested in both value and growth stocks, and has invested across market capitalization companies. The fund has a high risk (measured by standard deviation) than the category average.

ProsCons
Low expense ratio. Fund has outperformed the category average when the market was rising.Fund has underperformed the category average when the market was falling.
Conclusion:

Investors looking for regular income and capital appreciation from the stock market should consider such funds as part of their portfolios.

Disclaimer:

This is not recommendation advice, use it for educational purposes only. Mutual Fund investments are subject to market risks, read all scheme-related documents carefully. The NAVs of the schemes may go up or down depending upon the factors and forces affecting the securities market including the fluctuations in the interest rates. The past performance of the mutual funds is not necessarily indicative of the future performance of the schemes

Consult an expert advisor to get the right plan for you

Add comment

Your email address will not be published.