Dividend and Growth in SIP: Top 4 Dividend Yield Mutual Funds with Over 40 per cent Returns in 1 Year!
How Do Dividend Yield Funds Work?
Investors often find solace in stocks that not only promise growth but also deliver regular dividends. Enter Dividend Yield Mutual Funds, a unique investment avenue that focuses on stocks with a penchant for paying out dividends. In this blog post, we'll delve into the workings of these funds, understand who stands to benefit the most, and explore some of the top-performing schemes that have dazzled investors with over 40 per cent returns in the past year.
How Do Dividend Yield Funds Work?
SEBI, the regulatory authority, mandates that a minimum of 65 per cent of the assets under management (AUM) in a Dividend Yield Fund must be invested in equity and equity-related instruments of high dividend-yielding companies. However, in a bid to enhance returns, fund managers often allocate more than the prescribed percentage to such stocks. The remaining portion of the corpus is strategically invested in other assets, aiming to bolster returns while managing risk effectively.
These funds, by design, tread the path of stability by investing in companies that are mature or fall under the Large-Cap category. This approach not only provides investors with relatively stable returns but also positions Dividend Yield Funds as a reliable source of regular income, primarily through dividend.
Who Should Consider Investing in Dividend Yield Funds?
If you're an investor seeking stability and a steady income stream, Dividend Yield Funds could be the perfect fit for your portfolio. These funds cater to those who prioritize regular income derived from dividends and appreciate the security that comes with investments in mature or large-cap companies.
Top Performers in the Last Year
Now, let's shine the spotlight on some Dividend Yield Mutual Funds that have outshone the rest in the past year, delivering returns upwards of 40 per cent:
|
Scheme Name
|
Aum Rs in Cr
|
1 year return in %
|
|
ICICI Prudential Dividend Yield Equity Fund - Direct Plan - Growth
|
2,901.68
|
41.99
|
|
HDFC Dividend Yield Fund - Direct Plan - Growth
|
3,995.59
|
40.93
|
|
Aditya Birla Sun Life Dividend Yield Fund - Direct Plan - Growth
|
1,113.83
|
40.05
|
|
Tata Dividend Yield Fund - Direct Plan - Growth
|
639.71
|
37.23
|
These funds have not only weathered the market storms but have also emerged as champions in delivering robust returns. For investors seeking the perfect blend of stability and income generation, these Dividend Yield Mutual Funds present a compelling opportunity to ride the waves of the market while enjoying the steady flow of dividends. As always, before making any investment decisions, it's crucial to conduct thorough research and consider your financial goals and risk tolerance.