HDFC Dividend Yield Fund – Direct Growth

The HDFC Dividend Yield Fund is a thematic equity fund offered by HDFC Mutual Fund. The fund aims to provide both capital appreciation and dividends to its investors by investing in a diversified portfolio of equity and equity-related instruments of companies with a strong dividend yield.

The fund was launched on December 18, 2020, and is benchmarked against the NIFTY Dividend Opportunities 50 Total Return Index. This open-ended scheme offers an opportunity for investors looking for a potential source of income through dividend payouts, while also participating in the long-term growth potential of the equity markets.
Pros and Cons of HDFC dividend yield fund

How to invest in an HDFC dividend yield fund?

Investing in HDFC Dividend Yield Fund is made easy through 5Paisa. The process is streamlined, and efficient and does not require any paper-based documentation. Simply log in to your 5Paisa account and start investing in HDFC Dividend Yield Fund to experience the benefits of investing in a high-yield equity fund.

What is the expense ratio of the HDFC dividend yield fund?

HDFC Dividend Yield Fund Expense Ratio refers to the yearly management charge paid by investors to the mutual fund firm for the service of investing in HDFC Dividend Yield Fund. The fund’s administrative and operational expenses are partially covered by this charge.

The expense ratio is an important factor to consider when determining how much to invest in a mutual fund since it affects the investor’s return on investment (ROI). A lower expense ratio is always preferable as it reduces the cost of investment and helps in maximising the returns.

Who should invest in the HDFC dividend yield fund?

Investors who want to build a diverse portfolio of dividend-paying equities for long-term capital gain can consider the HDFC Dividend Yield Fund. It is a relatively low-risk investment option for those who aim to invest in equities over the medium to long term. The fund’s diversified portfolio helps to reduce the impact of market volatility and provides stability to the investment.

The scheme is also ideal for investors who aim to take advantage of tax arbitrage through mutual funds, rather than directly investing in dividend-yielding stocks. However, HDFC Mutual Fund recommends that an investor should have a minimum investment horizon of 3 years or more to invest in the HDFC Dividend Yield Fund.

What are the benefits of investing in the HDFC dividend yield fund?

Investing in HDFC Dividend Yield Fund offers several benefits for investors looking for a steady source of income and long-term capital appreciation. Some of the key benefits include:

1. Regular dividend income

The fund invests in dividend-yielding stocks, which means that investors can expect a steady stream of high dividends, indicating steady cash flows.

2. Tax-free dividends

Dividends received from the fund are tax-free at the hands of the investor, offering a high tax exemption threshold.

3. Minimised market volatility risk

By investing in dividend-yielding stocks, the fund helps minimise the market volatility risk and acts as a hedge against market turmoil.

4. Proven financial track records

The fund invests in blue-chip stocks that have proven financial track records, which means that the fund is always assured of high returns in the future.

5. Better yield in the long run

Investments in dividend yield funds provide a significantly better yield on investments in the long run as the fund managers only include blue chip stocks in the portfolio.

6. Suitable for different investment horizons and risk appetites

The investments made in dividend yield funds involve a marginal level of risk, making it suitable for investors with any investment horizon and risk appetite.