Dividend-paying mutual funds pay out annualized dividends to investors. These payments will be made on a regular basis, so as an investor, you can rest assured that your money is safe and secure. The fund’s revenues from the previous year will be used to pay these dividends.
Because dividends are paid out nearly immediately when a particular threshold is reached, Mutual Funds (MF) with a dividend option do not display strong growth in their Net Asset Value (NAV). In the case of debt funds, fund houses must pay a Dividend Distribution Tax (DDT) of 28.84 percent, which includes the cess and surcharge. The DDT does not apply to equity mutual funds, on the other hand.
Here are five dividend-paying mutual funds focused on Midcap equities that have performed well so far.
Top 5 Mid Cap Equity Dividend Funds to consider now
Kotak Emerging Equity Scheme
The assets under management of Kotak Emerging Equity Fund Direct-Growth have valued at Rs 15,709 crores (AUM). Kotak Emerging Equity Fund’s NAV for September 14, 2021, is 78.87.
It has returned an average of 21.93 percent per year since its inception.
The scheme invests primarily in mid-cap companies in order to produce long-term capital appreciation via a portfolio of equities and equity-related instruments.
If you invested Rs 5000 every month for three years, you would have received Rs 3.12 Lakh in returns. The amount would have been Rs 37,801 if a lump sum of Rs 20,000 had been invested.
Sundaram Mid Cap Fund
Sundaram Mid Cap Fund has a total asset value of 6,926 crores under management (AUM). It has returned an average of 18.36% every year since its inception.
The scheme invests in mid-cap stocks with the goal of capital appreciation. The fund defines a’midcap’ stock as one whose market capitalization does not surpass that of the 50th stock listed on the NSE (after sorting the shares in descending order of market capitalization). Sundaram Mid Cap Fund’s NAV for September 14, 2021 is 753.54.
L&T Midcap Fund
L&T Midcap Fund Direct-Growth manages a total of 6,948 crores in assets (AUM). It has returned an average of 21.12% every year since its inception.
To gain financial appreciation by predominantly investing in midcap equities. The Scheme will largely invest in firms whose market capitalization falls between the Nifty Free Float Midcap 100 Index’s highest and lowest constituents.
If you invested Rs 5000 every month for three years, you would have received Rs 2.77 Lakh in returns. The amount would have been Rs 30,944 if a lump sum of Rs 20,000 had been invested.
Taurus Discovery (Midcap) Fund
Taurus Discovery (Midcap) Fund Direct-Growth manages assets worth $75 million (AUM). Chemicals, Financials, Metals, Technology, and Construction make up the majority of the fund’s holdings.
It has returned an average of 18.28 percent per year since its inception.
The Scheme invests in a portfolio of equities and equity-related instruments, mostly from mid-cap firms, with the goal of achieving long-term financial appreciation.
If you invested Rs 5000 every month for three years, you would have received Rs 2.86 Lakh in returns. The amount would have been Rs 32,412i f a lump sum of Rs 20,000 had been invested.
SBI Magnum Mid Cap Fund
SBI Magnum MidCap Direct Plan-Growth manages assets of Rs 6,056 crores (AUM). The Construction, Automobile, Engineering, Financial, and Consumer Durables sectors account for the majority of the fund’s holdings.
The 1-year returns on SBI Magnum MidCap Direct Plan-Growth are 74.7 percent. It has returned an average of 20.61 percent every year since its inception.
By investing primarily in a highly-diversified basket of equity equities of Midcap businesses, the scheme intends to provide investors with potential for long-term capital growth as well as the liquidity of an open-ended scheme.
If you invested Rs 5000 every month for three years, you would have received Rs 3.11 Lakh in returns. The amount would have been Rs 35, 801 if a lump sum of Rs 20,000 had been invested.
How is Dividend Yield calculated in Mutual funds?
The dividend yield is calculated by multiplying the total dividends paid over the term by the stock’s current NAV (Net Asset Value). After that, the outcome is annualized. The gains from mutual fund schemes are used to pay dividends. As a result, whenever a scheme announces a dividend, its NAV decreases accordingly.
The following formula is used to determine the dividend yield ratio: Dividend Yield Ratio is calculated by multiplying the dividend per share by the market value per share. The dividend yield ratio can be calculated simply by taking the amount of dividend per share and dividing it by the market value of each share.
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