Equity: Thematic-Dividend Yield

What is it?

Thematic equity funds invest in stocks linked to a theme. These funds have a broader scope than sectoral funds, as they invest in stocks from various sectors that are linked to a particular theme. Dividend yield equity funds invest in stocks that pay high dividends. According to the SEBI dividend yield funds must invest 65% of the total money in equities.

Objective

The objective of these funds is to generate high periodic income while taking minimum risks for equity investors.

Suitability and opinion

We believe that these funds can be a suitable option for investors who are looking for a balanced approach to investing, as it combines the potential for regular income with long-term capital growth. These funds can be a good option for retired individuals. However, it is important to note that these funds may underperform during periods of market growth, and investors should carefully evaluate the fund's performance track record, expense ratios, and other key metrics before investing. The ideal time horizon for these funds is 4-6 years.