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Dividend-oriented mutual funds invest in stocks that have a long history of paying dividends. These businesses generate high profits that can be used to pay dividends. Dividend payout funds and dividend reinvestment funds are two types of dividend-oriented mutual funds. The customer receives regular dividends directly in this bank account if they choose the dividend payout option. Dividend reinvestment, on the other hand, allows the customer to reinvest the dividend in the same fund or another fund from the same fund house. These mutual funds must invest at least 65 percent of their assets in dividend-paying stocks, according to SEBI guidelines. These mutual funds dividends can only be paid when the fund manager makes a profit from its mutual fund holdings. As a result, the mutual fund pays a monthly, quarterly, half-yearly, or annual dividend.


Who Should Consider Investing Dividend Mutual Funds?

Investing in dividend mutual funds can help diversify an investors portfolio. This fund serves as a general investment vehicle for investors. Investors in dividend-paying mutual funds receive annualised payouts. Because these payments are usually made on a regular basis, an investor can feel reliable and comfortable investing in these funds. The schemes revenues from the previous year will be used to pay these dividends. Dividend yield is calculated by multiplying the total dividends paid over the term by the stocks current NAV (Net Asset Value). After that, the result is annualised. The profits from mutual fund schemes are used to pay dividends. As a result, whenever a scheme declares a dividend, its NAV decreases proportionately. Investors who are retired are looking for a steady stream of income from their investments. They should invest in a monthly dividend mutual fund.


Best Large Cap Equity Dividend Paying Mutual Funds 2021

Best Large Cap Equity Dividend Paying Mutual Funds 2021

NAV One-Year Return
Nippon India Large Cap Fund Rs 17.45 64.2%
SBI Bluechip Fund Rs 29.34 61.3%
Aditya Birla Sun Life Frontline Equity Fund Rs 29.34 60.3%
ICICI Prudential Bluechip Fund Rs 22.7 57.5%
Essel Large Cap Equity Fund Rs 18.09 54.9%

Nippon India Large Cap Fund

The NAV under the dividend plan is Rs 14.45. Nippon India Large Cap Fund has generated a return of almost 10.82 per cent since its launch. The minimum initial investment required is Rs 100. The expense ratio for the fund is 1.80%. The fund size is Rs 10,069. The one-year return of the fund is higher in the category. The fund has given a return of 64.2% in one year. This means, if you have invested Rs 5000 per month, now the returns would have been Rs 76,074. If invested a lump sum of Rs 5000, the amount would have been Rs 8,209. The five-year returns of the fund are 12.4%

Returns are calculated on an absolute basis for periods up to one year and on a compound annual growth rate (CAGR) for periods longer than one year. The calculation is as of May 12th, 21.


SBI Bluechip Fund

With a small investment of Rs 500, you can start investing in the SBI Bluechip Fund. The initial investment is Rs 5,000. The fund has a low expense ratio of 0.99%. The size of the fund is Rs 26,838 crore and fund one year return is higher than the category average returns. The top holdings of the fund are HDFC Bank, ICICI Bank, Infosys, and HCL Technologies. The NAV of the fund is Rs 29.34 as of May 12, 2021. If a lump sum of Rs 5000 had been invested before one year, the amount would have grown to Rs 8,125.


Aditya Birla Sun Life Frontline Equity Fund

The one-year return on the fund 60.3%. The fund is invested in Indian stocks to the tune of 96.95 percent, with 76.73 percent in large-cap stocks, 8.8 percent in mid-cap stocks, and 1.65 percent in small-cap stocks. The top holdings of the fund are ICICI Bank, Infosys, HDFC Bank, and Reliance industries. The expense ratio of the fund is 1.72% and size of the fund is Rs 19,499. The schemes goal is long-term capital growth through a portfolio that aims to be as diversified across various industries and/or sectors as its chosen benchmark index, the Nifty 50, with a target allocation of 100 percent equity. The secondary goal is to generate income and distribute dividends.


ICICI Prudential Bluechip Fund

To provide long-term capital appreciation and income distribution to investors through a portfolio that is primarily comprised of large-cap equity and equity-related securities. If the fund is sold before the 365-day period, IDCW charges 1.0 percent of the sell value. There are no additional fees. The funds one year return is 57.54%. The funds annualised 3 year return is 8.86%. If a person has started a SIP of Rs 1000 last year, the returns would have been Rs 14,590 with absolute returns of 21.58%.


Essel Large Cap Equity Fund

The NAV under the dividend plan is Rs 18.09. Essel Large Cap Equity Fund has generated a return of almost 54.4 in one year. The expense ratio for the fund is 2.55%. The fund size is Rs 95.55 Crore. The top portfolio of the fund consists of Reliance Industries, ICICI Bank, Infosys, and HDFC Bank. The Crisil has ranked number Three for the fund.

Disclaimer This article is strictly for informational purposes only. It is not a solicitation to buy, sell in securities or other financial instruments. Greynium Information Technologies Pvt Ltd, its subsidiaries, associates and the author of this article do not accept culpability for losses and/or damages arising based on information in this article.

Story first published: Friday, May 14, 2021, 10:37 [IST]

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