Mutual Funds Day 23: Dividend Yield Fund

People who invest in assets look for two possible types of returns

1. Capital Appreciation
2. Dividends

Capital Appreciation is when the valuation of the Asset grows and fetches you a higher resale value. Only Assets will have value appreciation, Liabilities do not. Time is a friend of assets and an enemy of liabilities.

Dividends are incomes paid out to the shareholders and can be considered similar to the rentals you get from a tenant. Few companies in India prefer to pay out a fraction of their profits as dividends to their shareholders, these firms are called high dividend-yield companies.

When a mutual fund invests in high-dividend stocks it is called Dividend Yield Fund. The rule states that a minimum of 65% of all assets should be held in this category.

Examples:

https://viswaram.com/mutual-funds-day-24-focused-funds-7fa9c02e6f9a

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