Do you consider yourself among the millions of Indian people who want to earn more income from their savings? If so, this blog is for you!
Savings mutual funds are among the best investment opportunities that enable you to invest and earn income consistently, and dividends in mutual funds provide you with an excellent chance to benefit from steady income.
But which mutual funds will pay dividends soon? You do not have to worry about this anymore. We have done some research for your convenience.
In this blog, we will share with you the list of the top 10 dividend-paying mutual funds in India that are expected to declare dividends soon. Learning about these funds will help you make good investment choices. So, open your wallets wider and watch your savings increase!
What are Dividends in Mutual Funds?
Some portion is returned to the investors when money is earned in a mutual fund. This is called a dividend, meaning in mutual funds. Where does this money originate from?
It occurs when the fund receives interest or profit from the shares or bonds owned or makes a profit by selling the shares owned.
How is this dividend paid? Each investor is issued a dividend based on the number of shares he owns. You can take this money with you or put it back into the fund, whichever you prefer.
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Factors to consider while selecting Dividends in Mutual Funds
- Past performance: If a mutual fund has done well in the past, it is likely to do well in the future and provide regular dividends.
- Regular dividend: This means you have to select funds that have paid dividends in the past and are more likely to continue doing so.
- Qualification of the fund manager: Another vital aspect is the fund manager’s knowledge and experience. A good fund manager has less effect on market fluctuations, and good dividends are also earned.
Upcoming Dividends in Mutual Funds in 2024
Let’s see the 10 best upcoming dividend mutual funds list in India in 2024:
1. LIC MF Dividend Yield Fund Direct-Growth
The best dividend mutual fund in India is LIC MF Dividend Yield Fund Direct-Growth. It is an open-ended equity fund NAV scheme, that invests in dividend-paying equity stocks primarily to generate income and capital appreciation.
The fund thus invests in firms with a better track record of providing stable and steady Dividends Mutual Funds India as the subjects of investment.
Key Highlights
- Expense Ratio: 1.45% (0.98% Category average)
- Fund Size: Rs. 241.77 Cr (0.86% of Investment in Category)
- NAV: Rs. 33.532 as of Jul 31, 2024
- 5-year return: 237.35%
- Dividend Yield: 27.49% (5-year returns)
2. ICICI Prudential Dividend Yield Equity Fund
The ICICI Prudential Dividend Yield Equity Fund is the second mutual fund with the best dividend yield. It is an equity mutual fund that provides investors with regular income and capital gains through dividend-paying stocks.
The fund targets the equities of those firms with a stable distribution record of regular and steady recent Dividends in Mutual Funds of India.
Key Highlight
- Expense Ratio: 1.85% (1.03% Category average)
- Fund Size: Rs. 4,256.91Cr (4.13% of Investment in Category)
- NAV: Rs.57.70 as of Jul 31, 2024
- 5-year return: 221.15%
- Dividend Yield: 23.58% (5-year returns)
3. Aditya Birla SL Dividend Yield Fund
The Aditya Birla SL Dividend Yield Fund is a diversified equity fund that provides regular payouts and capital appreciation via dividend-paying stocks.
The fund invests more in companies that EARN stable and consistent dividend yields, which can be reasonably predictable.
Key Highlights
- Expense Ratio: 1.83% (1.03% Category average)
- Fund Size: Rs. 1,446.88 Cr (6.74% of Investment in Category)
- NAV: Rs. 520.55 as of Jul 31, 2024
- 5-year return: 213.15%
- Dividend Yield: 25.31% (5-year returns)
4. UTI Dividend Yield Fund
UTI Dividend Yield Fund is an open-ended equity scheme that invests in dividend stocks to provide regular income and capital appreciation.
The fund is dominated by stocks of firms that provide consistent Dividends in Mutual Funds, which makes the yield relatively steady.
Key Highlights
- Expense Ratio: 1.78% (1.03% Category average)
- Fund Size: Rs. 4,071.32Cr (2.98% of Investment in Category)
- NAV: Rs. 194.98 as of Jul 31, 2024
- 5-year return: 204.19%
- Dividend Yield: 24.15% (5-year returns)
5. Templeton India Equity Income Direct Plan-Growth
The Templeton India Equity Income is a dividend yield fund that aims to generate consistent income and long-term capital gains through equity investments.
The target for the fund is to select companies that provide smooth and steady Dividends in Mutual Funds; thus, it would provide a relatively stable cash inflow.
Key Highlights
- Expense Ratio: 1.92% (1.03% Category average)
- Fund Size: Rs. 2,325.52 Cr (4.37% of Investment in Category)
- NAV: Rs. 160.77 as of Jul 31, 2024
- 5-year return: 198.15%
- Dividend Yield: 22.91% (5-year returns)
6. HDFC Dividend Yield Fund
The HDFC Dividend Yield is an open-ended regular gross scheme that focuses on achieving regular income and capital appreciation through investments in dividend stocks.
It aims to periodically buy stakes in these enterprises because their primary source of income is based on relatively stable Dividends in Mutual Funds.
Key Highlights
- Expense Ratio: 1.85% (1.03% Category average)
- Fund Size: Rs. 2,366.15 Cr (6.74% of Investment in Category)
- NAV: Rs. 34.19 as of Jul 31, 2024
- 5-year return: 195.19%
- Dividend Yield: 21.91% (5-year returns)
7. Tata Dividend Yield Fund
The Tata Dividend Yield Fund is an open-ended equity fund that primarily invests in dividend-paying stocks to deliver income and growth.
The fund invests mainly in companies with a good history of steady dividend payments, providing a somewhat predictable revenue stream.
Key Highlights
- Expense Ratio: 1.83% (1.03% Category average)
- Fund Size: Rs. 998.06 Cr (2.98% of Investment in Category)
- NAV: Rs. 19.93 as of Jul 31, 2024
- 5-year return: 192.15%
- Dividend Yield: 20.91% (5-year returns)
8. Sundaram Dividend Yield Fund
The Sundaram Dividend Yield The fund is an open-ended equity scheme that invests in dividend-paying stocks to provide steady income and capital appreciation.
The fund is aimed at businesses that provide frequent and predictable dividend payments, which can provide relatively stable income.
Key Highlights
- Expense Ratio: 1.92% (1.03% Category average)
- Fund Size: Rs. 923.54 Cr (2.14% of Investment in Category)
- NAV: Rs. 154.46 as of Jul 31, 2024
- 5-year return: 185.19%
- Dividend Yield: 19.91% (5-year returns)
9. SBI Dividend Yield Fund
The SBI Dividend Yield The fund is an open-ended equity fund that aims to provide regular dividends along with capital appreciation through investments in dividend-paying stocks.
The fund aims for organizations with a proven history of steady dividend payments, which provides a more predictable income stream.
Key Highlights
- Expense Ratio: 1.88% (1.03% Category average)
- Fund Size: Rs. 8,375.28 Cr (5.85% of Investment in Category)
- NAV: Rs. 16.19 as of Jul 31, 2024
- 5-year return: 190.19%
- Dividend Yield: 20.49% (5-year returns)
10. IDBI Dividend Yield Fund Direct-Growth:
The IDBI Dividend Yield Fund Direct-Growth is an open-ended equity scheme that aims to generate regular income and capital appreciation by investing in dividend-yielding stocks.
The fund focuses on companies with a strong track record of paying consistent Dividends in Mutual Funds, offering a relatively stable source of income.
Key Highlights
- Expense Ratio: 1.03% (Direct Plan)
- Fund Size: Rs. 241.77Cr (1.23% of Investment in Category)
- NAV: Rs. 20.55 as of Jul 31, 2024
- 5-year return: 183.19%
- Dividend Yield: 19.49% (5-year returns)
Tips for Investors
Let’s see some tips for investors to know how to invest in dividend mutual funds:
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Importance of Diversification
The risk of multiple mutual funds could be significantly reduced and the revenue from the received Dividends in Mutual Funds would be more stable when investing in more than one mutual fund.
The recommended proportion of high-yield and stable funds must be considered among the principal investment portfolios.
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Monitoring Fund Performance
One of the key issues of using dividends in mutual funds as investment instruments is the problem of timely identification of the changes in their dividend pay-outs, it is crucial to perform frequent monitoring of funds’ performance.
Investors need to read the reports of funds concerned and trends in the market to arrive at conclusions for investment.
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Staying Updated with Fund Announcements
The announcements on the funds and the declarations of dividends in mutual funds will assist investors in better planning their investments.
Reading the fund newsletters or getting the financial news portals is also helpful in getting updates.
Conclusion
The dividends in mutual funds are a source of high investment returns that should not be overlooked when it comes to investment. Investors can improve their income and meet their objectives by analyzing and monitoring the information about future Dividends in Mutual Funds.
The following is the list of the dividend options in mutual funds by 2024 for persons interested in receiving income from the assets they invest in. The first thing to remember is research, and speaking to a financial planner is always recommended to value your unique circumstances and personal tolerance to risk.
If you are interested in maximizing your investment returns, you may also want to check out our comprehensive guide on ” Bank Stocks to Buy for the Long Term.” It highlights top-performing bank stocks that offer stability and growth potential for long-term investors.
By diversifying your portfolio with these bank stocks, you can supplement your Dividends in Mutual Funds and create a strong financial strategy for 2024 and beyond.
Disclaimer: Information shared in this blog is general information and shall not be taken for Investment advice. Any investment Before you decide on your choice, it is wise to seek the advice of your financial planner.
The latest dividends from mutual fund investments are also inherent in certain risks associated with the stock marketplace. Investors should read all the documents touching on investments very carefully.
FAQs
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What are the advantages of buying mutual funds with high dividend yields?
There are several advantages of investing in dividends in mutual funds with high dividends:
- Regular Income: Investors get regular cash flows through annuities, which could be helpful for constant income.
- Reinvestment Opportunities: Re-investing the dividends back into buying more shares is also possible, thus compounding the returns.
- Tax Advantages: Dividends can also benefit from better tax treatment compared to other forms of income in some instances.
- Diversification: Most mutual funds that declare dividends invest in a wide range of income-generating securities, making them less risky.
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What criteria should I use in selecting dividend-paying mutual funds?
Several factors are looked at to determine the best mutual funds for dividend payout:
- Historical Dividend Performance: When evaluating the fund, consider the following areas: the fund’s performance in paying out dividends.
- Fund Objectives and Strategies: Make sure its investment objectives suit your financial plan for the account.
- Expense Ratio: This means that the lower figures at the expense line can be beneficial to get the most from your investments.
- Fund Manager Experience: Fund management is another critical factor that may significantly determine the fund’s performance, especially a skilled and experienced fund manager.
- Diversification: Think about the distribution of the fund’s assets among the different sectors and types of assets.
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How are dividends from mutual funds taxed in India?
If the mutual funds that Indian investors receive have dividends, they are taxed. According to the current tax laws, the mutual fund dividends received are included in the total income, and the tax is paid according to the income tax bracket.
- Also, the fund house must deduct TDS at the rate of 10 percent if the dividend is more than Rs 5,000 in a financial year.