The Hindu Business Line : Cholamandalam AMC mulls dividend yield scheme

Birla Sun Life AMC was the first fund house to launch such a scheme. Recently, Principal PNB AMC and Tata Mutual Fund had launched their dividend yield funds.

Birla Dividend Yield Plan has registered returns of 41.51 per cent for the last year and 27.59 per cent for the last six months. The fund is currently quoting a net asset value of Rs 25.75.

Principal PNB's Dividend Yield Fund (DYF) has posted returns of 3.5 per cent for the last one month. The fund was launched in September 2004.

Tata Mutual fund, whose initial public offering for its DYF closed on October 27, collected over Rs 417 crore during the IPO.

According to the offer document, Chola's open-ended equity fund seeks to provide capital appreciation income by investing predominantly in equity and equity-related securities of a well-diversified portfolio of companies that have a relatively high dividend yield.

The fund would invest 80-100 per cent of its corpus in equity and equity-related instruments and up to 20 per cent in cash and money market instruments.

Entry load of two per cent is charged on investments less than Rs 25 lakh and 2 per cent exit load is also charged for redemptions within a year through the systematic investment and transfer plans.

The issue is priced at Rs 10 per unit and the minimum investment amount is Rs 5,000, says the offer document.

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