FUND
NAV
Press Enter or Space to open search suggestions
Press Enter or Space to open search suggestions
Trusted by 2M+ Users
Squeeze the most out of your trades with Lemonn - your right investment partner.
FUND
NAV
Squeeze the most out of your trades with Lemonn - your right investment partner.
Filters
NAV RANGE
FUND
NAV
Overview
Dividend Yield Mutual Funds primarily invest in dividend-yielding stocks.
The strategy generally looks for companies that distribute part of their profits to shareholders while also considering business fundamentals, valuation, financial strength, and future prospects.
The word dividend can be misleading for new investors. Investing in a Dividend Yield Fund does not mean the mutual fund itself guarantees regular dividend payments to investors.
Explained
A Dividend Yield Fund is an equity mutual fund category focused predominantly on dividend-yielding stocks.
Under SEBI's current mutual fund categorisation framework, these schemes must invest at least 65% of their total assets in equity and equity-related instruments of dividend-yielding companies.
Dividend yield is commonly calculated as:
For example, if a company pays an annual dividend of ₹5 per share and its share price is ₹100, its dividend yield would be 5%.
A high dividend yield alone does not make a company an attractive investment.
Explained
The fund manager identifies companies that meet the scheme's dividend-yield investment approach.
The research process can include:
A company may offer a high dividend yield because it generates strong cash flows.
However, dividend yield can also rise because the share price has fallen sharply.
The fund manager therefore needs to distinguish sustainable dividend-paying businesses from companies where a high yield reflects financial or business problems.
Suitability
Dividend Yield Funds may suit investors who:
They should not be chosen simply because the investor wants fixed or guaranteed monthly income.
Advantages
Companies capable of paying sustainable dividends often generate meaningful cash flows. However, dividend history alone does not establish company quality.
Dividend yield can be one factor used to identify potentially attractive valuations. Fund managers typically combine it with other fundamental measures.
Dividend-oriented stocks can behave differently from high-growth or momentum-oriented companies during some market periods. This can provide diversification by investment style.
The fund manager evaluates whether dividends are sustainable and whether the underlying business remains attractive.
Before you invest
Companies can reduce, suspend, or stop dividends. Past dividend payments do not guarantee future payouts.
A company's dividend yield can increase because its share price has fallen sharply. If the business is deteriorating, the apparently attractive yield may not be sustainable.
The name refers to the type of stocks in which the fund invests. It should not be confused with the mutual fund's Income Distribution cum Capital Withdrawal, or IDCW, option.
Some mature dividend-paying businesses may reinvest less capital into rapid expansion. This does not make them inferior investments, but the portfolio can behave differently from growth-focused strategies.
Dividend-paying companies can be more common in certain sectors. Check whether the fund has significant exposure to a limited number of industries.
Taxation
Dividend Yield Funds generally qualify as equity-oriented mutual funds when they meet the applicable tax requirements.
For qualifying units held for more than 12 months, gains are generally treated as long-term capital gains.
Long-term capital gains covered under Section 112A are generally taxed at 12.5% above the applicable annual exemption threshold.
Qualifying gains on units held for 12 months or less are generally treated as short-term capital gains and taxed at the applicable special rate under Section 111A.
Any IDCW distribution received by an investor is subject to the tax rules applicable to such income in the investor's hands.
Tax provisions can change, so investors should verify the latest rules.
Step by step
Good to know
It is an equity mutual fund that predominantly invests in dividend-yielding stocks according to its scheme mandate.
Dividend yield compares a company's annual dividend per share with its current share price, generally expressed as a percentage.
No. The category name describes the fund's stock-selection approach. It does not guarantee that the mutual fund investor will receive regular distributions.
Dividend Yield refers to an investment strategy focused on dividend-paying stocks. IDCW is a mutual fund distribution option under which the scheme may distribute income or capital subject to applicable conditions.
No. An unusually high yield can result from a sharp fall in the company's share price or an unsustainable dividend.
No. They are equity-market investments and can experience losses.
Recap
Loved by 2M+ users with a 4.3+ ⭐ app rating. Join now!
Squeeze the most out of your trades with Lemonn - your right investment partner.
FUND
LIC MF Dividend Yield Fund Direct GrowthEquity Dividend₹35.92
0.08%
7.27%
18.33%
15.65%
I
ICICI Prudential Dividend Yield Fund Direct GrowthEquity Dividend₹57.87
0.34%
-1.93%
14.42%
17.08%
T
Tata Dividend Yield Fund Direct Reinvestment Inc Dist cum Cap WdrlEquity Dividend₹21.57
0.45%11.82%
14.13%
14.06%
UTI-Dividend Yield Fund -Growth-DirectEquity Dividend₹187.32
0.3%-2.17%
11.95%
10.64%
Aditya Birla Sun Life Dividend Yield Fund Direct Plan GrowthEquity Dividend₹497.53
0.74%2.92%
11.73%
13.44%
Templeton India Dividend Yield Fund Direct GrowthEquity Dividend₹148.17
0.5%-1.08%
10.73%
12.61%
HDFC Dividend Yield Fund Direct GrowthEquity Dividend₹26.59
0.28%-0.07%
10.44%
13.96%
Sundaram Dividend Yield Fund - Direct Plan - Growth OptionEquity Dividend₹142.04
0.47%-3.7%
9.02%
9.56%
SBI Dividend Yield Fund Direct Reinvestment Inc Dist cum Cap WdrlEquity Dividend₹16.07
0.42%3.72%
10.75%
N.A.
Baroda BNP Paribas Dividend Yield Fund Direct GrowthEquity Dividend₹9.91
0.62%2.77%
N.A.
N.A.
LIC MF Dividend Yield Fund Direct Reinvestment of Income Distribution cum Cap wdrlEquity Dividend₹35.9
0.08%7.26%
18.31%
15.64%
I
ICICI Prudential Dividend Yield Fund Direct Reinvestment Inc Dist cum Cap WdrlEquity Dividend₹24.36
0.37%-2.54%
13.64%
16.29%
T
Tata Dividend Yield Fund Direct GrowthEquity Dividend₹21.57
0.45%11.82%
14.13%
14.06%
UTI-Dividend Yield Fund-Direct Payout Inc Dist cum Cap WdrlEquity Dividend₹39.32
0.3%-4.28%
11.12%
10.12%
Aditya Birla Sun Life Dividend Yield Fund Direct Plan Payout Inc Dist cum Cap WdrlEquity Dividend₹45.93
0.73%2.8%
11.61%
13.33%
Templeton India Dividend Yield Fund Direct Rnvstmnt of Inc Dist cum Cap WdrlEquity Dividend₹26.53
0.5%-5.79%
8.73%
11.12%
HDFC Dividend Yield Fund Direct Reinvestment Inc Dist cum Cap Wdrl Opt PayoutEquity Dividend₹21.55
0.29%-0.05%
10.27%
13.85%
Sundaram Dividend Yield Fund- Direct Plan Half Yearly Reinvestment of Income Dis cum Cap WdrlEquity Dividend₹59.29
0.47%-4.09%
8.66%
9.25%
SBI Dividend Yield Fund Direct GrowthEquity Dividend₹16.07
0.42%3.72%
10.75%
N.A.
Baroda BNP Paribas Dividend Yield Fund Direct Reinvestment Inc Dist cum Cap WdrlEquity Dividend₹9.91
0.62%2.77%
N.A.
N.A.
Showing 1–20 of 29
