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Nilanjan Dey

Kolkata , Feb. 16

WITH the financial year coming to a close, equity funds are lining up dividends, a few of them large enough to draw more than a passing attention from the market.

The list of prospective payouts, with record dates between the last week of February and the end of March, include 100 per cent from UTI MF's Master Value Fund, 75 per cent from both Reliance Growth and Reliance Vision, as well as 45 per cent from DSP Merrill Lynch TIGER Fund.

Dividends are also expected fromING Vysya Tax Saving Fund, UTI Dividend Yield Fund and Reliance Banking Fund.

Payment of dividends, as fund houses point out, is not guaranteed and is subject to the availability of distributable surpluses.

A large number of equity schemes has been able to pay dividend in recent times, thanks to efficient fund management in an advancing market.

Marketing executives working with MFs see dividends as an important input.

"Equity funds have lately done well, a performance that is reflected in rising NAVs. Dividends are a natural corollary," said Mr Ravi Sharma, Head of sales at Birla Sun Life MF.

Most of the forthcoming large payouts are from funds that are diversified in nature.

These include UTI Master Value Fund, which claims to invest in stocks that are "relatively undervalued" and "is committed to booking profits periodically in order to retain the value orientation of the portfolio".

Also, in the diversified category is DSPML TIGER Fund, which seeks to invest in stocks benefiting from `infrastructure growth and economic reforms'.

For the UTI Fund, incidentally, this is the third 100 per cent dividend in three years, the last two record dates being December 26, 2003 and February 7, 2005.

The two Reliance MF schemes - Vision and Growth, the record dates being in the March 28-30 period - had paid dividends (albeit lower) in December.

Reliance Banking Fund has lined up a 50 per cent dividend, also to be paid out at the same time.

A consistent dividend payment policy is important for unitholders who wish to receive regular payouts, suggest intermediaries. "Investors look forward to tax-free dividends from their funds, especially those that have been performing well," said Mr Rajiv Bose of Vedika Securities, a fund distributor.

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