Curb downside risk amid market correction with dividend yield funds

But limit exposure as they can lag behind growth-oriented peers

Dividend yield funds (direct plans) have given a category average return of 13 per cent over the past year, outperforming several other diversified equity categories, such as large-cap (6.4 per cent), mid-cap (12.3 per cent), and flexi-cap (7.5 per cent). At present, there are eight dividend yield funds, which together manage Rs 9,767 crore (data as on April 30).

When markets get overvalued and witness correction, investors begin to seek refuge in safer avenues. One such option with the potential to generate good returns over the long term is dividend yield funds. These are equity schemes that invest at least 65