Guys, tell me about the mutual funds that pay a monthly/quarterly/yearly dividend. I am zero in this but getting interested.
I read an article related to your query!!
i am just copy-pasting that article for your reference.
{Source : Quora}
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I have 3CR of rupees. I will take early retirement at the end of 2023. Where should I invest so that I get a minimum of 1.5 lakhs as a fixed income?
Here is a beautiful plan specially for persons like you looking for regular monthly income after retirement.
Invest your Rs 3 Cr in
HDFC Balanced Advantage Fund - IDCW option - Regular Plan.
IDCW means “Income Distribution and Capital Withdrawal” plan.
I have mentioned this Fund because it is giving consistent IDCW amount every month. You can choose to spread your investment over 2 - 3 other funds having the same monthly IDCW Payout option.
This plan is also suitable for Non Resident clients, whereby they invest a lumpsum amount in this fund and the IDCW amount gets credited every month, into a joint bank account with their aged parents . The parents can withdraw this amount to meet their monthly needs.
About HDFC Balanced Advantage Fund (BAF) -Regular Plan - IDCW option:
The current NAV of this fund is Rs 33.164, its returns since launch is 18.15 % and its AUM is 61,599 Cr. approx. This fund invest in Equity and Debt in 60:40 ratio approx. and is one of the Older and trusted funds from HDFC’s basket.
Now the Plan and its working :
Your Investment in HDFC BAF - Rs 30000000 / 33.164 = 904595.34 Units.
IDCW or Dividend paid monthly = 0.23 Paisa per unit.
Total Dividend Paid Per month = Rs 0.23 x 904595.34 Units = Rs 208056.92 per Month.
This means its Rs 208056.92 x 12 = Rs 24,96,683.15 or Rs 24.96 Lakhs or about 8.32 % approx. per year.
This IDCW amount is generally processed on the Last Thursday of the month and the amount is transferred in the next three / four working days to your bank account.
Kindly note 15 G / H needs to be submitted if you wish to avoid TDS. Also note Short Term or Long term Capital Gains would be applicable on the withdrawn amount after one Year.
Depending on the market movement the NAV of the Units will go up or down and they will also go down immediately after the IDCW amount of Rs 0.23 Paisa is paid out.
Kindly note this IDCW amount per unit of Rs 0.23 is not guaranteed and the amount can go up or down depending on decisions made by the fund managers and other trustees.
Details about the fund can be found on the funds website.
One of my clients had invested Rs 10 Lakhs in this fund and scheme when the NAV was Rs 24.00 and the current NAV is Rs 33.16. So, while he got a monthly payout of Rs 8555 per month approx. since the last three and half years, his initial capital has also gone up in value to Rs 13.81 Lakhs as per current NAV.
If you put your capital in a FD it will remain same throughout its tenure, but in this scheme you are giving an opportunity to your capital to grow at the same time enjoying a monthly cash flow as mentioned in the example above.
In your query you mentioned you want Rs 1.5 Lakhs per month, but here you are getting Rs 2.08 Lakhs per month, so my advise to you is reinvest this excess amount of 2.08 - 1.50 = Rs 58,000/- back in to the same fund and scheme. This way in your next dividend payout cycle you will get a higher dividend payout and this will continue month on month till you choose to close the scheme.
Kindly note Mutual Fund investments are subject to market risks. Kindly consult your Mutual Fund advisor before investing.
Happy Investing.