The Hindu Business Line : Dividend season begins for equity funds

The winter months may turn out well for equity fund investors who had chosen dividend options. Fund houses are again lining up payouts, most of them in the 10-40 per cent range.

Prudential ICICI MF, Tata MF and Sundaram BNP Paribas MF are among those that have already made announcements in this regard. A number of others are expected to make similar declarations in the days ahead, fund sources indicate.

The last few days of November will lead to the height of the dividend season. November 24 in particular is important - it is the record date for Pru ICICI Discovery (20 per cent), Tata Life Sciences (25 per cent) and Sundaram Select Focus (35 per cent). Each has declared dividends more than once; for investors in the Sundaram MF scheme, this, in fact, will be the seventh payout. The list of dividend payers also includes LIC MF's Index Fund's Sensex option, which will parcel out 50 per cent on November 22. It had made a similar payment earlier this year.

The current spell will follow the dividends paid in mid-November, MF circles add. Among those that entered the dividend list then were Sundaram BNP Paribas Rural India Fund, which shelled out 10 per cent on November 17, and HDFC Multiple Yield Fund - Plan 2005, which paid 7.5 per cent on November 16. Both funds paid their maiden dividends on these days.

Earlier in the month, dividends were declared in Franklin India Prima Plus (60 per cent, on November 15), Tata Infrastructure (15 per cent, November 10) and Pru ICICI Tax Plan (25 per cent, November 10).

The latest crop of dividends announcements may be seen in the backdrop of the advancing equity market and its effect on net asset values of funds. The last six months or so, considering the sharp decline in stocks recorded in mid-May, have been especially active for fund houses. Diversified equity funds have given roughly 11 per cent on an average in the past six months ended November 20. Index funds have fared better, while technology and banking funds have turned in even better performance.

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