Dividend mutual funds

Although some people invest in mutual funds to gain regular income in the form of interest. But in some cases, people want intermittent cash flow to meet their inevitable expenses. This is where best paying dividend mutual funds come into play.

Dividend-paying mutual funds invest in equity & equity-oriented schemes in companies that pay dividends. Learn how to evaluate best equity mutual funds. The dividend is the profit that is earned by the company and this profit is shared in the form of dividends with the equity investors of the company. Profit equals the selling price of mutual funds, which is higher than the cost price of it. According to the scheme, the fund manager either purchases more stocks or distributes the dividend as the case may be.

When an investor invests in the dividend-paying scheme, then with time the investors get huge profits which in turn will result in excellent growth of the funds. The AMC (Asset Management Company handling the mutual fund’s investments) can then pay these dividends monthly, quarterly, weekly or annually (as the case may be).

Working of Dividend-Paying mutual funds

With the regular annual returns, the investor feels safe investing in such instruments. The taxes charged on interest received on debt funds are 28.84% and this includes cess and surcharge. The Finance Minister has recently announced a 10% tax on dividends as well. Along with this, there will be a 10% tax on long term capital gains on equity mutual funds. Keep reading on how tax is charged on mutual funds.

20 Best dividend-paying mutual fund schemes in India

The complete list of top 20 dividend-paying mutual fund schemes in India is given below

Mutual fund schemeFund categoryNAV (In Rs.)The dividend (Rs. )Dividend yield (3 years )
DSP Blackrock Equity opportunities Fund direct DividendLarge & Midcap fundRs. 56.224.509.61%
Canara Robeco Emerging equities Direct DividendLarge & Midcap fundRs. 67.903.004.82%
Principal Emerging Fund Direct DividendLarge & Midcap fundRs. 90.45.9218.34%
L&T Midcap Fund Direct DividendMid-cap fundRs. 48.903.545.06%
Sundaram Large and Mid-cap Fund Direct dividendLarge & Midcap fundRs. 237.303.308.95%
SBIMF Smallcap Fund Direct DividendSmall-Cap fundRs. 41.009.109.08%
Reliance Small Cap Fund Direct DividendSmall-Cap fundRs. 34.403.004.36%
Kotak Standard Multi-cap Fund Direct DividendMulti-Cap fundRs. 25.002.004.91%
HDFCMF Small Cap Fund Direct DividendSmall-Cap fundRs. 31.402.758.25%
Aditya Birla Sun Life Small Cap Fund Direct DividendSmall-cap fundRs. 23.601.316.30%
UTI Equity Fund-Direct DividendMulti-cap fundRs. 111.902.922.54%
Mirae Asset India Equity Fund-Direct DividendMulti-cap fundRs. 37.602.0011.01%
SBI Magnum Multi-Cap Fund Direct DividendMulti-cap fundRs. 26.002.2013.80%
Aditya Birla Sun Life Equity Fund-Direct DividendMulti-cap fundRs. 139.500.808.43%
Motilal Oswal Long Term Equity Fund-Direct DividendELSSRs. 17.400.1010.14%
Invesco India Tax Plan Direct DividendELSSRs. 23.702.209.41%
HDFC Equity Savings Fund Direct DividendEquity savings fundRs. 12.200.225.75%
Indiabulls Arbitrage Fund Direct DividendArbitrage fundRs. 10.500.055.75%
Reliance Arbitrage Fund Direct DividendArbitrage fundRs. 10.900.045.58%
SBI Equity Savings Fund Direct Monthly DividendEquity savings fundRs. 12.400.044.96%

Best Dividend paying mutual funds (Company-wise list)

Franklin India Mutual Funds

Objective

The main aim of the Franklin India Mutual funds scheme is to attain capital appreciation by investing in long term growth opportunities in the economy.

Investment 

The investment is in a broad range of stocks without any limitation, either qualitative or quantitive across market capitalization

PeriodReturns (as on July 9th, 2018)
1 month-1
3 month-0.8
6 month-7
1 year7.3
2 years11.8
3 years8.4
5 years18.5

Aditya Birla Sun Life Frontline Equity Fund

The objective of the scheme 

The main aim of this scheme is to attain long term capital growth. Aditya Birla mutual fund schemes.

Investment

The target allocation of the funds is in 100% equity & equity related instruments at being diversified across various industries.

PeriodReturns (as on July 9th, 2018)
1 month-0.6
3 month-0.6
6 month-4.1
1 year-4.1
2 years12.6
3 years9.7
5 years17.1

Aditya Birla Sun Life Dividend Yield Plus

Objective

Aditya Birla Sun Life funds aim at generating capital growth & income

Investment 

The pool of money is invested in a well-diversified portfolio of dividend paying companies that have a relatively high dividend yield.

PeriodReturns (as on July 9th, 2018)
1 month-3
3 months-4.6
6 months-12.4
1 year-1.5
2 years9.8
3 years6.2
5 years14.8

ICICI Prudential Dividend Yield Equity Fund

Objective

The main aim of this fund is to attain medium to long term capital gains & dividend distribution.

Investment 

This objective is achieved by investing in a well-diversified portfolio of equity & equity related instruments which offer an attractive dividend yield

PeriodReturns (as on July 9th, 2018)
1 month-2.4
3 months-4.1
6 months-10.8
1 year-0.3
2 years14.5
3 years11.8
5 years

Principal Dividend Yield Fund- Growth

Objective 

Like any other investment on this list, the main aim is to attain capital appreciation.

Investment 

The investment is done predominantly in a well-diversified portfolio of companies that have a relatively high dividend yield.

DurationReturns (as on July 9th, 2018)
1 month-0.5
3 months0.8
6 months-5.5
1 year13.7
2 years20.6
3 years13.7
5 years18.1

L&T Emerging Business Fund-Direct Plan (D)

Objective 

Fund’s main aim is to attain long term capital appreciation. Must review the L&T infrastructure fund.

Investment

Diversified equity fund which will invest predominantly in small-cap stocks.

DurationReturn (as on July 9th, 2018)
1 month-2.5
3 month-6.4
6 month-12
1 year8.5
2 years26.9
3 years23.2
5 years

UTI Dividend Yield Fund- Growth

Objective 

Like any other investment on this list, the main aim is to attain capital appreciation. You must be wondering what are UTI mutual funds.

Investment 

It attains this objective by investing in dividend yielding equity & equity related securities

DurationReturns (as on July 9th., 2018)
1 month-2.4
3 month-0.1
6 month-3
1 year8
2 years13.4
3 years9.5
5 years14

Kotak Standard Multicap Fund-Direct Plan (D)

Objective

Long-term capital appreciation is the main aim of this fund. Inform yourself on the Kotak mutual funds.

Investment

The investment is in equity & equity related securities, which are generally selected on a few selected sectors.

DurationReturns (as on July 9th, 2018)
1 month0.7
3 months1.6
6 months-1.4
1 year9.4
2 years17.6
3 years14.4
5 years22.6

Axis Midcap Fund-Direct Plan

Objective

Long-term capital appreciation

Investment 

This is achieved by investing in equity as well as equity-related instruments of Mid-cap companies. Must know about mid-cap funds

DurationReturns (as on July 9th, 2018)
1 month0.1
3 months1.2
6 months1.6
1 year18.3
2 years18.7
3 years11.4
5 years24.9

Invesco India Growth Fund-Direct Plan (D)

Objective 

Long-term capital appreciation

Investment

This is achieved by investing in equity as well as equity-related instruments of Large as well as Mid-cap companies.

DurationReturns (as on July 9th, 2018)
1 month-0.6
3 months0.1
6 months0.1
1 year16.6
2 years20.1
3 years13.8
5 years21.3

BNP Panirbas Dividend Yield Fund- Growth

Objective

The target of the investment is to generate long term capital actively managed portfolio

Investments

The investments are in equity and equity-related securities

DurationReturns (as on July 9th, 2018)
1 month4.5
3 months2.2
6 months0.2
1 year4
2 years11.4
3 years9.5
5 years20.2

UTI Master share Unit Scheme (D)

Objective 

The target of the investment is to generate long term capital actively managed portfolio

Investment 

The investments are made in equity and equity-related securities of large-cap companies.

DurationReturns (as on July 9th, 2018)
1 month5.5
3 months7.8
6 months10.1
1 year5.2
2 years15.2
3 years10.4
5 years30.4

Canara Robeco F.O.R.C.E. Fund-Regular Plan

Objective

The main objective of the fund is to generate long-term capital

Investment

The money is invested in equity & equity-related securities of companies that directly or indirectly benefit from the growing consumer demand in India.

DurationReturns (as on July 9th, 2018)
1 month
3 months0.9
6 months-4.5
1 year-1.3
2 years22.6
3 years19.2
5 years49

Benefits of the Best dividend paying mutual funds

  • A stream of regular dividends indicates a form of steady cash flows.
  • There are no taxes when the interest is in the hands of the investors.
  • When an investment is made in dividend paying mutual funds, this reduces the market risk and thus acts as a hedge against market turmoil.

Drawbacks of the Best dividend paying mutual funds

  • Any dividend paid is after the DDT (Dividend Distribution Tax) is charged. This means that although the dividend is tax-free in the hand of the investors, the divided he/she receives is after a deduction. But what are the Types & objectives in a mutual fund?
  • Dividends will be there if there is a profit. A loss incurring company doesn’t guarantee regular income in the form of dividends.
  • In the case the market is booming, the dividends underperform the growth fund.
  • If a company pays high dividends, then this might mean the company doesn’t have enough growth opportunities.

A friend in need is a friend indeed. And we at WealthBucket is the friend you need to invest in equity mutual funds, large-cap funds, multi-cap funds, or debt funds. You can either contact us at +91 8750005655 or email us at contact@wealthbucket.in

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A complete list of mutual funds in India

Types of mutual funds in India

10 Topmost companies of mutual funds in India

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