SBI Mutual Fund has launched a dividend yield fund, which will invest in equities of dividend yielding companies. The open-ended scheme will aim to generate returns through both — capital appreciation and dividend distribution.
The scheme will target aggregate dividend yield that is at least 50 per cent higher than the Nifty 50 index, the fund house said. "(the scheme will invest) in businesses across market capitalization, be style agnostic with no sector bias, with attractive dividend yields plus potential growth in dividends," SBI MF said in a press release.
"High dividend yield companies are generally thought of only from the angle of providing regular income, but many of them are strong growth-oriented businesses across market cap with the potential of long-term wealth creation. SBI Dividend Yield Fund presents an opportunity for those looking to invest in such strong businesses with steady cash flows for long-term," said D P Singh, Deputy MD and Chief Business Officer, SBI MF.
The new fund offering opened for subscription on Monday and will close on March 6.
Dividend yield funds, which primarily invest in equities of companies that declare dividends regularly, are more tax-efficient than equities with the dividend payout option.