Adani Enterp. 2601.10↓-32.60(-1.24%)
Adani Ports 726.30↓-7.75(-1.06%)
Apollo Hospitals 4585.75↑35.35(0.78%)
Asian Paints 3123.60↑3.00(0.10%)
Axis Bank 916.30↑0.15(0.02%)
B P C L 368.00↑1.40(0.38%)
Bajaj Auto 4547.15↑49.05(1.09%)
Bajaj Finance 6826.70↑46.15(0.68%)
Bajaj Finserv 1445.85↑8.60(0.60%)
Bharti Airtel 801.70↑1.75(0.22%)
Britannia Inds. 4558.65↑37.00(0.82%)
Cipla 931.05↑0.65(0.07%)
Coal India 240.15↑0.85(0.36%)
Divi's Lab. 3366.10↓-19.70(-0.58%)
Dr Reddy's Labs 4511.15↑50.60(1.13%)
Eicher Motors 3620.55↑18.95(0.53%)
Grasim Inds 1696.00↓-1.95(-0.11%)
H D F C 2697.35↓-8.50(-0.31%)
HCL Technologies 1112.20↑4.85(0.44%)
HDFC Bank 1631.90↓-5.30(-0.32%)
HDFC Life Insur. 568.65↑5.95(1.06%)
Hero Motocorp 2727.20↑16.75(0.62%)
Hind. Unilever 2623.70↓-4.60(-0.18%)
Hindalco Inds. 405.90↓-4.40(-1.07%)
ICICI Bank 951.25↓-2.15(-0.23%)
IndusInd Bank 1253.40↓-6.80(-0.54%)
Infosys 1302.00↑1.95(0.15%)
ITC 433.05↑3.90(0.91%)
JSW Steel 703.95↓-0.15(-0.02%)
Kotak Mah. Bank 1937.25↑15.75(0.82%)
Larsen & Toubro 2206.55↑8.90(0.40%)
M & M 1267.10↓-1.45(-0.11%)
Maruti Suzuki 9305.00↑104.30(1.13%)
Nestle India 21400.00↓-3.70(-0.02%)
NTPC 174.95↑0.80(0.46%)
O N G C 165.75↑0.75(0.45%)
Power Grid Corpn 236.85↑2.75(1.17%)
Reliance Industr 2458.75↑4.20(0.17%)
SBI Life Insuran 1172.75↑7.15(0.61%)
St Bk of India 584.40↑2.80(0.48%)
Sun Pharma.Inds. 936.50↑4.90(0.53%)
Tata Consumer 773.25↑3.20(0.42%)
Tata Motors 527.50↓-1.00(-0.19%)
Tata Steel 105.50↓-0.10(-0.09%)
TCS 3309.30↑12.25(0.37%)
Tech Mahindra 1096.70↑6.20(0.57%)
Titan Company 2706.75↑23.30(0.87%)
UltraTech Cem. 7665.75↑11.50(0.15%)
UPL 681.30↑0.65(0.10%)
Wipro 397.65↓0.00(0.00%)

Conservative investors eyeing regular income can opt dividend yield funds

Hold them for at least five years, and withdraw money via the more tax-efficient SWP route

Sarbajeet K Sen

Investors need to understand their nature and potential risks

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4 min read Last Updated : May 23 2023 | 8:17 PM IST

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With companies preparing to announce their final dividends over the coming months, there has been a surge of interest in high dividend yield stocks. However, investors should consider whether they should try to reap the benefit of high dividends by investing directly in stocks, or if the dividend yield fund route is the superior option.

Understanding dividend yield

Novice investors find high dividend yields very alluring. A 100 per cent dividend signifies a payout equivalent to the share’s face value. For example, if a stock has a face value of Rs 10 and declares a 100 per cent dividend, the shareholders receive Rs 10 per share. The dividend yield, calculated by dividing the per-share dividend of Rs 10 by the share price of, say, Rs 1,000, is merely 1 per cent.