A dividend yield fund aims to limit the downside and earn
capital appreciation by investing in stocks quoting at dividend yield more than
that of the benchmark and can offer good growth in future. Nine mutual funds
use the dividend yield strategy to deploy money. Most of these have managed to
contain volatility, measured by standard deviation. However, the returns have
been a mixed bag. “A stock bought at attractive dividend yield limits downside
risk and if it is fundamentally sound, it can give capital appreciation in
addition to dividend income and Investment planning services in India,” says Alam.
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