The Hindu Business Line : UTI Mutual launches dividend yield fund

(Left) Mr D.S.R. Murthy, Executive Director, UTI Asset Management Company Pvt Ltd, Dr R.H. Patil, Chairman, and Mr A. K. Sridhar, Chief Investment Officer, at a press conference to announce the launch of Dividend Yield Scheme in Mumbai on Tuesday. - Shashi Ashiwal

Mumbai , April 5

WITH interest rates going up, we do not expect debt funds to be attractive to investors, said Dr R.H. Patil, Chairman, UTI Mutual fund, at the launch of UTI MF's Dividend Yield Fund.

The portfolio as a whole will give good returns, making it a more viable investment vehicle despite fluctuations, and investors should not time the market, he added.

The investment strategy of the scheme would focus on identifying and investing in a basket of high dividend yield companies, which are expected to declare dividends on a consistent basis. This will also provide an opportunity for capital appreciation due to the high intrinsic value of the underlying stocks.

The fund would ideally be suited for investors who are just beginning to invest in equities and for those who booked profits at 5000-5500 levels of the Sensex and who now want to re-enter the market, said Mr A.K. Sridhar, Chief Investment Officer, UTI AMC.

The fund would have a larger portfolio of about 70 stocks. Of this, 65-100 per cent would be invested in high dividend yield stocks and up to 35 per cent can be invested in other stocks. The fund manager would also evaluate business fundamentals, management competence, growth prospects and industry scenario other than dividend yield.

The fund would be benchmarked against the BSE 100 index.

The initial public offer of the fund is open from April 11 to May 3. The minimum initial investment is Rs 5,000.

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