Dividend yield mutual funds have proven to be an excellent choice for investors seeking regular income along with capital growth.
Investing in mutual funds can be an effective way to meet both short-term and long-term financial goals. For those who seek a regular income stream along with capital appreciation, dividend yield mutual funds offer a compelling investment opportunity. Over the past five years, several dividend yield mutual funds have delivered impressive returns on Systematic Investment Plans (SIPs). Below, we explore the top three funds that have turned a Rs 15,000 monthly SIP into significant wealth.
1. ICICI Prudential Dividend Yield Equity Fund – Direct Plan
This fund stands out for its remarkable performance, making it the top choice for dividend yield investors. Over the past five years, a Rs 15,000 monthly SIP in this fund has grown to an impressive Rs 21,70,639.
- Performance: The fund has delivered an outstanding 36.13% annualized SIP return over five years.
- Fund Details: With assets under management (AUM) of Rs 4,642 crore and a net asset value (NAV) of Rs 57.36, this fund is benchmarked against the NIFTY 500 TRI index. Since its inception in May 2014, it has consistently performed, offering an 18.53% annualized return.
- Investment Strategy: The fund has allocated 94.55% of its portfolio to equities, focusing on high-dividend-yielding stocks. This strategy has allowed it to provide both regular income and capital appreciation to its investors.
2. Templeton India Equity Income Fund – Direct Plan
Ranking second on our list, the Templeton India Equity Income Fund has also delivered strong returns, making it a reliable option for dividend yield investors.
- Performance: Over the last five years, this fund has offered a 33.08% annualized SIP return, growing a Rs 15,000 monthly SIP to Rs 20,18,885.
- Fund Details: The fund manages Rs 2,510 crore in assets and has an NAV of Rs 161.18. It is also benchmarked against the NIFTY 500 TRI index and has provided an 18.03% annualized return since its inception in January 2013.
- Investment Strategy: The fund invests 88.73% of its assets in equities, with a significant portion of the remaining 5.55% held in cash and cash equivalents. This balanced approach ensures liquidity while still focusing on dividend yield opportunities.
3. Aditya Birla Sun Life Dividend Yield Fund – Direct Plan
The Aditya Birla Sun Life Dividend Yield Fund rounds out our top three with its solid performance over the past five years.
- Performance: The fund has achieved a 32.62% annualized SIP return in the five-year period, turning a Rs 15,000 monthly SIP into Rs 20,00,436.
- Fund Details: With an AUM of Rs 1,562 crore and an NAV of Rs 524.85, this fund is also benchmarked against the NIFTY 500 TRI. Since its launch in January 2013, it has provided a 15.71% annualized return.
- Investment Strategy: The fund is heavily invested in equities, with 96.46% of its portfolio allocated to this asset class. Noteworthy holdings include prominent companies like Infosys, Coal India, NTPC, CMS Info Systems, ITC, and TCS. This diversified approach across various sectors helps mitigate risk while ensuring consistent returns.
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Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.
