Mumbai, Feb. 22 -- Dividend-yield mutual funds have outperformed their flexi-cap cousins, a longtime favourite of investors, over the past 3, 5, and 10 years. Should you include them in your portfolio?

Such funds invest primarily in stocks of companies that pay a dividend (a portion of their profits) to shareholders. Dividend yield is simply the dividend amount relative to the company's share price. They work like a dividend-yielding version of flexi cap funds, which also have the freedom to invest across large, medium and small-caps in any proportion. However, many dividend-yield funds currently have big allocations to large-caps that pay sizeable and sustainable dividends.

According to Value Research data, dividend-yield funds returne...