If your question was for me, I was talking about ‘dividend yield funds’ category, not the dividend option while investing in MFs.
And as far as investing is concerned, one point that was made my managers is that, as dividends are taxed now, with TDS cut while giving dividends, and MFs need not pay taxes on dividends as them being institutions, and the NAV will grow accordingly.
Also, the funds invest in companies which are also growing, which essentially means more FCF, and run by managements who want to either sustain the dividend payout or even increase, after their capex plans, so dividends will increase and there will be price appreciation to for the stocks.
So I am guessing, there could be a potential merit with these funds, although there could be differences in the way different funds approach the theme, different parameters that they based their strategy on, which will be addressed in their SIDs.
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