20, Feb 2023
SBI Mutual Fund to launch SBI Dividend Yield Fund
Pune, February 20, 2023: SBI Mutual Fund announced the launch of the SBI Dividend Yield Fund, an open-ended equity scheme investing predominantly in a well-diversified portfolio of equity and equity-related instruments of dividend-yielding companies. The new fund offer would open on February 20, 2023, and close on March 6, 2023. The first-tier benchmark of the fund is the NIFTY 500 TRI.
The investment objective of the scheme is to provide investors with opportunities for capital appreciation and/or dividend distribution by investing predominantly in a well-diversified portfolio of equity and equity-related instruments of dividend-yielding companies. This is proposed to be achieved by investing in businesses across market capitalization, being style agnostic with no sector bias, with attractive dividend yields plus potential growth in dividends, and aiming to achieve an aggregate dividend yield that is at least 50% higher than that of the Nifty 50 Index. The scheme will consider dividend-paying stocks that have paid dividends or repurchased shares in at least one of the previous three fiscal years.
Mr. Shamsher Singh, MD & CEO, of SBI Mutual Fund, said, “I am happy to announce the launch of SBI Dividend Yield Fund, an offering which provides investors a diversified mix of high and growing dividend yield companies. As the largest fund house in the country, we continue to add to our bouquet of offerings, and we believe this category has an opportunity to grow and find merit in investors’ portfolios.”
Mr. D P Singh, Deputy MD and Chief Business Officer, SBI Mutual Fund, said, “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. Those who invest in direct equity, investors wanting long-term wealth creation, and even first-time mutual fund investors will find this fund suitable. Investors who want regular income can use the SWP (A) facility offered in this fund to plan regular tax-efficient cash flows’’.
Investors may opt for a tax-efficient way to receive regular cashflows by registering for SWP (A) Facility (subject to terms & conditions mentioned in the Scheme Information Document) which attracts capital gains as applicable for equity-oriented mutual funds. SWP (A) Facility is a customized facility offered to SBI Mutual Fund investors seeking regular cash flows in a quite simple and tax-efficient manner from their investments. All one has to do is select to withdraw a fixed % of their cost of investment or any specified amount to meet their regular cashflow needs from the various options available (monthly, quarterly, half-yearly, and yearly). SWP (A) facility can be opted for both in Growth and IDCW while the remaining corpus continues to earn returns.
The minimum application amount is Rs. 5,000 and in multiples of Rs. 1 thereafter. The scheme would invest between 65% – 100% of its assets in equity and equity-related instruments of dividend-yielding companies (including equity derivatives), up to 35% in other equity and equity-related instruments, up to 35% in debt securities (including securitized debt and debt derivatives) and up to 10% in units issued by REITs and InvITs. The scheme may seek investment opportunities in foreign securities including ADR/GDR/Foreign equity and overseas ETFs and debt securities subject to regulations that may not exceed 35% of the net assets of the scheme.
Mr. Rohit Shimpi, CFA, will be the fund manager of this scheme with Mr. Mohit Jain the dedicated fund manager for overseas securities. Rohit currently manages the SBI Magnum Equity ESG Fund and the equity portion of SBI Retirement Benefits Fund.