SBI Mutual Fund on Monday announced the launch of the Dividend Yield Fund, an open-ended equity scheme investing predominantly in a well-diversified portfolio of equity and equity-related instruments of dividend-yielding companies.
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The new fund offer would open for subscription on February 20, 2023, and close on March 6, 2023. The first-tier benchmark of the fund is the NIFTY 500 TRI.
"The investment objective of the scheme is to provide investors with opportunities for capital appreciation and/or dividend distribution by investing predominantly in a well-diversified portfolio of equity and equity-related instruments of dividend-yielding companies," SBI said in a statement.
This is proposed to be achieved by investing in businesses across market capitalisation, be style agnostic with no sector bias, with attractive dividend yields plus potential growth in dividends, and aim to achieve an aggregate dividend yield that is at least 50 percent higher than that of the Nifty 50 Index.
The scheme will consider dividend-paying stocks that have paid dividends or repurchased shares in at least one of the previous three fiscal years.
Investors may opt for a tax-efficient way to receive regular cashflows by registering for a systematic withdrawal plan (SWP) (A) Facility which attracts capital gains as applicable for equity-oriented mutual funds.
SWP (A) Facility is a customised facility offered to SBI Mutual Fund investors seeking regular cash flows in a quite simple and tax-efficient manner from their investments. All one has to do is select to withdraw a fixed percentage of their cost of investment or any specified amount to meet their regular cashflow needs from the various options available (monthly, quarterly, half-yearly and yearly). SWP (A) facility can be opted for both in Growth and IDCW while the remaining corpus continues to earn returns.
The minimum application amount is Rs 5,000 and in multiples of Rs. 1 thereafter. Allocation patterns in this scheme are:
| Type of instruments | Min % | Max % | Risk Profile |
|---|---|---|---|
| Equity and equity related instruments ofdividend yielding companies (includingequity derivatives) | 65% | 100% | High |
| Other equity & equity related instruments | 0% | 35% | High |
| Debt securities (including securitizeddebt & debt derivatives) and moneymarket instruments | 0% | 35% | Low to Medium |
| Units issued by REITs and InvITs | 0% | 10% | Medium to High |
Shamsher Singh, MD and CEO of SBI Mutual Fund, said, "I am happy to announce the launch of SBI Dividend Yield Fund, an offering which provides investors a diversified mix of high and growing dividend yield companies. As the largest fund house in the country, we continue to add to our bouquet of offerings, and we believe this category has an opportunity to grow and find merit in investors’ portfolios."
D P Singh, deputy MD and chief business officer, SBI Mutual Fund, said, "SBI Dividend Yield Fund presents an opportunity for those looking to invest in such strong businesses with steady cash flows for long-term. Those who invest in direct equity, investors wanting long term wealth creation and even first-time mutual fund investors will find this fund suitable. Investors who want regular income, can use the SWP (A) facility offered in this fund to plan
regular tax efficient cash flows."
First Published: Feb 20, 2023 10:38 PM IST
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