SBI Dividend Yield Fund will invest in a mix of equity and equity-related instruments of divided yielding companies. New fund offer will close on March 6, 2023. Minimum investment is Rs. 5,000 and in multiples of Re. 1
SBI Mutual Fund on February 20, 2023 announced the launch of the SBI Dividend Yield Fund. The open-ended equity scheme will invest predominantly in a well-diversified portfolio of equity and equity-related instruments of dividend yielding companies, SBI Mutual Fund announced in a press statement.
The new fund offer (NFO), which opened on February 20, 2023 will close on March 6, 2023. SBI Mutual Fund said that the benchmark of the fund is the NIFTY 500 TRI. The investment objective of the scheme would be to provide investors with opportunities for capital appreciation and/or dividend distribution. This would be achieved by investing predominantly in a well-diversified portfolio of equity and equity-related instruments of dividend yielding companies, it said.
“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 per cent 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,” SBI Mutual Fund said in a statement.
According to SBI Mutual Fund, the scheme would invest between 65 per cent and 100 per cent in equity and equity-related instruments of dividend-yielding companies (including equity derivatives), up to 35 per cent in equity and equity related instruments, up to 35 per cent in debt securities (including securitised debt and debt derivatives) and up to 10 per cent in units issued by real estate investment trusts (REITs) and infrastructure investment trusts (InvITs).
“The scheme may seek to invest opportunities in foreign securities including ADR/GDR/foreign equity and overseas exchange-traded funds (ETFs) and debt securities subject to regulations which may not exceed 35 per cent of the net assets of the scheme,” it further said.
The minimum application amount would Rs. 5,000 and in multiples of Rs. 1 thereafter.
Shamsher Singh, managing director and CEO, SBI Mutual Fund, said in a statement: “I am happy to announce the launch of SBI Dividend Yield Fund. This offering 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.”
DP Singh, deputy managing director and chief business officer, SBI Mutual Fund, said: “High dividend yield companies are generally thought of only from the angle of providing regular income, but many of them are strong growth-oriented businesses across market cap with the potential of long-term wealth creation. SBI Dividend Yield Fund presents an opportunity for those looking to invest in such strong businesses with steady cash flows for long-term.”
He added that the fund is suitable for first-time investors, those wanting long-term wealth creation as well as those investing in direct equity.
“Investors who want regular income, can use the systematic withdrawal plan (SWP) facility offered in this fund to plan regular tax efficient cash flows,” he added.
According to SBI Mutual Fund, investors will also have the option to opt for a tax efficient way to receive regular cashflows by registering for SWP.