Looking for regular income from mutual funds? These top Flexi Cap IDCW schemes delivered up to 9.51 per cent trailing three-year annual distribution yield, but here’s why investors should look beyond past payouts before investing.
Mutual Funds have become one of the most popular investment options among Indian investors. They allow investors to participate in the stock market without having to pick individual stocks.
However, mutual funds are available in different categories, each designed to suit different investment goals and risk appetites. One such category is Flexi Cap Funds, which offer fund managers the freedom to invest across Large-Cap, Mid-Cap and Small-Cap stocks.
Also Read – Best Performing Mid Cap Mutual Funds: Top 5 Schemes Based on 1-Year Returns
What are Flexi Cap Mutual Funds?
Flexi Cap Funds are equity mutual funds that invest across companies of all market capitalisations. Unlike large-cap or mid-cap funds, these schemes are not restricted to a particular segment of the market.
As per SEBI regulations, Flexi Cap Funds must invest at least 65 per cent of their assets in equities and equity-related instruments. The remaining allocation can be adjusted based on market conditions and the fund manager’s outlook.
Highest Dividend-Paying Flexi Cap Funds
The table below lists the top Flexi Cap Funds based on their trailing three-year annual dividend (distribution) yield.
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Scheme Name
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AMC
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Launch Date
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Trailing 3-Year Annual Dividend Yield (per cent)
|
|
HDFC Flexi Cap IDCW
|
HDFC Mutual Fund
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January 1, 1995
|
9.51
|
|
PGIM India Flexi Cap Regular IDCW
|
PGIM India Mutual Fund
|
February 25, 2015
|
9.16
|
|
HSBC Flexi Cap IDCW
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HSBC Mutual Fund
|
February 24, 2004
|
9.06
|
|
DSP Flexi Cap Regular IDCW
|
DSP Mutual Fund
|
April 29, 1997
|
8.45
|
|
Mahindra Manulife Flexi Cap Fund Regular IDCW
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Mahindra Manulife Mutual Fund
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August 23, 2021
|
7.94
|
Source: Data as of July 21, 2026. Distribution yield calculated for the period from July 21, 2023, to July 21, 2026.
Should You Invest Based Only on Dividend Yield?
A high historical dividend or distribution yield should not be the sole reason for selecting a mutual fund. Past performance can provide useful insights, but it does not guarantee future results. Market conditions, economic cycles, interest rates, corporate earnings and sector trends keep changing, which can influence a fund’s future performance.
Instead of focusing only on historical distribution yield or returns, investors should consider whether the fund’s investment approach aligns with the future outlook of different sectors and themes. A diversified portfolio with exposure to businesses that have strong long-term growth prospects may be better positioned to create wealth over time.
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Disclaimer: The article is for informational purposes only and not investment advice.