Multi-cap play helps beat peers, Dividend Yield Funds a good option for retail investors

Dividend Yield Funds are a good option for retail investors in the present volatile markets. One of the chief reasons for this is they protect the downside in investments for investors. Dividend yield funds invest in companies which generate stable cash flows and pay dividends regularly. Due to this, the performance of most dividend yield schemes has been stable even in falling markets.

More so, like a crucial financial parameter, dividend yield also gives an idea of how inexpensive or expensive a given stock is. Among the dividend yield schemes, BNP Paribas Dividend Yield is a good choice for retail investors who invest for the long-term. The fund follows a multi-cap approach which means that it invests in companies which have high dividend yields across market cap. In terms of performance, the scheme has beaten its peers for one, three and five year periods. It gave 17% and 13% returns in the past three and five year periods when schemes in the category gave 15% and 10% for the same period, respectively.

For the past ten years, it has consistently beaten its benchmark Nifty 200 by a considerable margin. For instance, in the past three and five years when the Nifty 200 gave 10% and 6.85% returns, the scheme gave 17% and 13.8% returns. This is due to astute stock picking of the scheme’s fund manager Shreyas Devalkar who has been with the scheme for the close to five years.