* SBI Mutual Funds launched the SBI Dividend Yield Fund on February 20, 2023.
* The minimum application amount is Rs 5,000 and in multiples of Rs. 1 thereafter.
* The scheme will invest between 65%- 100% of its assets in equity and equity-related instruments of dividend-yielding companies
SBI Mutual Fund has floated an open-ended equity scheme, SBI Dividend Yield Fund, which will be looking to invest in a well-diversified portfolio of equity and equity-related instruments of dividend-yielding companies. The scheme was floated for subscription on February 20, 2023, and will close on March 6, 2023. The first-tier benchmark of the fund is the NIFTY 500 TRI.
The SBI Mutual Fund said that the main 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.
The fund house said that it would be investing in businesses across market capitalisation 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.
The scheme also aims to achieve an aggregate dividend yield that is at least 50 percent higher than that of the Nifty 50 Index.
Shamsher Singh, MD and CEO of SBI Mutual Fund, said: “The SBI Dividend Yield Fund is an offering that 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.”
Under the new scheme, investors may opt for a tax-efficient way to receive regular cash flows by registering for a Systematic Withdrawal Plan (SWP) (A) facility, which attracts capital gains as applicable for equity-oriented mutual funds.
The SWP (A) facility is a customised facility offered to all SBI MF investors seeking regular cash flows in a quite simple and tax-efficient manner from their investments.
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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, which can be done monthly, quarterly, half-yearly and yearly. SWP (A) facility can opt for both Growth and IDCW while the remaining corpus continues to earn returns.
The scheme would invest between 65 per cent to 100 per cent of its assets in equity and equity-related instruments of dividend-yielding companies (including equity derivatives), up to 35 per cent in other equity and equity-related instruments, up to 35 per cent in debt securities (including securitized debt and debt derivatives) and up to 10 per cent in units issued by REITs and InvITs.
The scheme may seek investment opportunities in foreign securities including ADR/GDR/Foreign equity and overseas ETFs and debt securities subject to regulations, which may not exceed 35 per cent of the net assets of the scheme.
DP 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 the 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.’’
Rohit Shimpi, CFA, will be the fund manager of this scheme with Mohit Jain the dedicated fund manager for overseas securities. Shimpi currently manages the SBI Magnum Equity ESG Fund and the equity portion of the SBI Retirement Benefit Fund.
