Dividend Yield Mutual Funds

Dividends are typically taxed as income, which can reduce your overall return, especially if you are in a high tax bracket.

Since these funds focus on companies with a history of payouts, they may underperform in bull markets compared to growth-oriented funds that prioritize capital appreciation.

The priority is on generating income, so capital appreciation of the fund's share price may be slower compared to other equity funds.

Like any mutual fund, dividend yield funds also have expense ratios that eat into your returns. These fees cover the fund's operational costs.

Retirees or those nearing retirement relying on investment income benefit from the steady stream of dividends.

The focus on established companies with a history of stable payouts makes these funds generally less risky.
 

The lower volatility associated with these funds can help retirees and conservative investors protect their principal.

Download the INDmoney app and create your free investment account by completing your KYC ( Know Your Customer).

Once your Free investment account is ready, you can either search for a Dividend Yield Mutual Fund or go to the mutual fund section and tap on Dividend Yield mutual funds.

Choose a Dividend Yield Mutual Fund by looking at aspects like past returns, volatility, downside capture ratio, AUM, Expense ratios and underlying stocks and sectors.

You can choose to set up SIP in Dividend Yield mutual funds or even invest as lumpSum. Once you are on the individual Dividend Yield mutual fund page click from the bottom “One-time” for lump sum investment or “SIP” for systematic investment plan. 

Choose the amount that you want to invest as SIP or LumpSum.

Set up payments. If you choose to set up SIP in Dividend Yield mutual funds,  you can do a free automatic pay set up via bank mandate or UPI. If you choose to invest in lumpsum (one-time) then you can pay via UPI, netbanking, NEFT or RTGS.