I can invest Rs 5,000 a month in dividend yield funds via the SIP route. I expect dividends of about 10-15 per cent per year. Please suggest some funds.
-Dev Ashish
Your question reflects one of the biggest misunderstandings concerning dividend yield funds. You should not be expecting periodic dividends from such funds. If periodic dividends is your need, invest in MIPs. The reasons to invest in dividend yield funds are greater stability and superior returns. These funds have done very well over the past 4-5 years and are now accepted as a mainstream category of equity funds. They should be a good part of your portfolio. They might not participate in a great bull run, but they will always be stable during uncertain times. A couple of good dividend yield funds to choose from are Birla Sun Life Dividend Yield and UTI Dividend Yield.
This article was originally published on July 05, 2012.
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