Top 5 highest dividend-paying mutual funds and their respective record dates!

The Direct plan offers a higher dividend at 40 per cent compared to the Regular plan's 35 per cent

Mutual funds, a cornerstone of smart investing, distribute dividends by harnessing realized profits within their portfolio. These profits stem from the sale of investments or the receipt of dividends and interest. It's important to remember, though, that the unrealized gains from unsold investments remain off the dividend radar.

In essence, when you receive a dividend, you're essentially cashing in your own investment, a slice of your Net Asset Value (NAV). This withdrawal, while welcome, leads to a dip in the NAV. It's a reminder that dividends aren't an extra profit; they're your money returned.

Behind the scenes, skilled fund managers navigate the complex terrain of market conditions to determine when and how much to declare in dividends. Their decisions are strategic, reflecting the ever-changing investment landscape.

Dividend-focused options are a safe haven for risk-averse investors, providing a steady income stream. However, it's essential to recognize that this approach can disrupt the compounding of wealth over time.

It's also noteworthy that dividends from Debt Funds can carry a heavier tax burden. To optimize tax efficiency, consider a Systematic Withdrawal Plan (SWP), especially if you fall into lower tax brackets.

Now, if you're on the hunt for the best dividend mutual funds and are curious about upcoming dividend declarations, we've got you covered.

Here are five schemes edging closer to their record date for dividend distribution

The table provides a snapshot of the highest dividend-paying mutual funds and their respective record dates. These funds are distributed across different categories, offering investors varying dividend percentages and amounts. Let's break down the key observations:

1. Franklin India Technology Funds: Both the Direct and Regular plans of this equity-oriented Information Technology (IT) fund have declared dividends with a record date of November 3. The Direct plan offers a higher dividend at 40 per cent compared to the Regular plan's 35 per cent. This suggests that investors in the Direct plan will receive a dividend of Rs 4 per unit, while those in the Regular plan will receive Rs 3.5 per unit.

2. Sundaram Infrastructure Advantage Funds: Similar to the Franklin India Technology Funds, this infrastructure-themed equity fund has both Direct and Regular plans declaring dividends with record date as November 3. The Direct plan offers a higher dividend at 34.7 per cent, resulting in a dividend of Rs 3.47 per unit. In contrast, the Regular plan provides a 32.63 per cent dividend, equivalent to Rs 3.26 per unit.

3. Franklin India Opportunities Fund: This thematic equity fund is offering a dividend of 26 per cent, resulting in a dividend of Rs 2.6 per unit and record date is November 03. 

Disclaimer: The article is for informational purposes only and not investment advice.