Templeton Indian Equity Income Fund
A diversified open-ended equity fund that invests primarily in stocks with a current or potentially attractive dividend yield in order to provide a combination of regular income and long-term capital appreciation.
Franklin Templeton Mutual Fund Indian Equity Growth Income Fund is a thematic dividend-yielding mutual fund plan. The Templeton India Equity Income Fund-Growth manages assets of 1,148 crore (AUM). The fund has a cost ratio of 2.3%, which is more than most other Thematic-Dividend Yield funds.
Templeton India Equity Income Fund has a one-year growth rate of 60.57%. It has averaged 14.05% per year since its inception.
The Energy, Technology, Construction, FMCG and Automotive sectors represent the majority of the fund’s assets. Infosys Ltd., Power Grid Corpn. Of India Ltd., Embassy Office Parks REIT, Brookfield India Real Estate Trust REIT and Tata Power Co. Ltd. are the top five holdings of the fund.
UTI Dividend Yield Fund
UTI Dividend Yield Fund Regular Plan-Growth is a UTI Mutual Fund Thematic-Dividend Yield mutual fund plan. The assets under management (AUM) of UTI Dividend Yield Fund Regular Plan-Growth are 3,028 crore. The fund has a cost ratio of 2.21 percent, which is higher than most other dividend yield thematic funds. The UTI Dividend Yield Fund’s regular plan growth gains are 50.59 percent over the past year. It has generated an average annual return of 15.29% since its inception.
The majority of the fund’s money is invested in the technology, consumer goods, energy, financials and metals sectors. Compared to other funds in the category, it has less exposure to the tech and consumer products sectors.
The fund is invested in Indian stocks up to 99.45%, of which 63.72% in large cap stocks, 22.56% in mid cap stocks and 11.89% in small cap stocks.
Principal Dividend Yield Fund
The Primary Dividend Yield Fund – Direct Plan will be subject to an exit charge. For units with a value greater than 24% of the investment, a redemption fee of 1% will be paid if redeemed within 365 days.
A minimum investment of Rs 5000 is required, with an additional investment of Rs 1000. SIP investments start at Rs 500.
Principal Dividend Yield Fund Direct-Growth is a thematic dividend mutual fund plan of a principal mutual fund. Principal Dividend Yield Fund Direct-Growth had 224 crores in assets under management (AUM) and is a modest fund in its class. The fund has a cost ratio of 2.1% which is higher than most other Thematic-Dividend Yield funds.
Over the past year, the returns of the principal Dividend Yield Fund Direct-Growth Fund were 50.27%. It has had an average annual return of 14.53 percent since its inception.
Who should invest in dividend yielding funds?
These funds are compared to the Nifty Dividend Opportunities 50 Index, which monitors high yielding companies. These funds favor large caps, despite the fact that they can invest in all market caps and sectors. The majority of these funds have invested at least half of their net assets in large cap companies. Dividend Yield funds invest in established and healthy, less volatile and capital intensive treasury businesses, such as utilities and mining.
Investors looking for a steady stream of income might choose a dividend yielding fund. Although the dividends paid by this type of mutual fund are not particularly high, some income is better than nothing. However, as stated earlier, dividend payments are not guaranteed and are totally dependent on the performance of the underlying company as well as market movements.
Mutual funds are exempt from taxes on dividends received from issuing companies. Dividends paid by mutual funds are now taxed in the hands of investors according to their tax bracket. The capital gains tax rate offered by these funds varies depending on the length of ownership and the type of exposure to equities.
The dividend will be taxable exclusively in the hands of investors as of April 1, 2020.
On dividend income distributed to residents, UCIs retain 10% and 20% withholding tax at source (TDS) respectively. If the dividend income exceeds Rs 5,000, this applies. Accordingly, growth plans are recommended for investors.
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