February and March are usually the months when companies and mutual funds declare dividends. It’s a usual annual practice as March is usually the financial year end and funds are generous in giving out dividends. But this year has been different. Equity funds have declared dividends with yields as high as 20-25%.
Dividend yield is dividend per unit in rupees divided by the net asset value (NAV). Typically, dividend yields are in the range of 5-10%. Mutual fund experts say that dividend yield of greater than 15% indicates that the scheme has paid high dividends. Close to seven equity-oriented funds had declared a dividend yield of more than 15%, till 21 March, according to data by Value Research. DSP Blackrock Equity Fund’s (DBEF) dividend yield was the highest at 25.54%, with a dividend of Rs16 per unit. In 2017 (for the full year) its dividend yield was 11.66%; 12.32% in 2016 and 14.96% in 2015, according to Accord Fintech, a mutual funds database. Recently, Kotak Classic Equity scheme declared a dividend of Rs4.778 per unit, translating into a dividend yield of 20%. Between 2015 and 2017, its dividend yield was between 2% and 3%. As per Value Research, there are 45 equity oriented funds whose dividends yields are 10% or more.
