Saturday, September 25, 2010

Equity schemes make a dividend splash in Sept

With Sensex soaring to 20,000 levels, equity fund managers have started booking profits and declaring dividends. Over 13 equity funds have declared dividends in September, with many more planning payouts during the forthcoming festive season.

Equity schemes of Birla Sun Life Mutual Fund (MF), DSP Blackrock MF, UTI MF, Canara Robeco MF and Fortis MF have recently declared dividends. Around 55 schemes, or 25 per cent of all the schemes, have declared dividends in the last three months. Markets as measured by the BSE Sensex are up 11.5 per cent in September. Said Amit Nigam, senior portfolio manager, equities at Fortis MF: “Declaring dividends is a regular process and rising equity markets isn’t the only reason.” He adds that dividends are a systematic way of distributing returns earned by the fund to investors.

Equity funds have declared 7-22 per cent dividends in September. Interestingly, the dividend payout has not been higher this time. Fortis Dividend Yield declared 15 per cent, which amounted to a payout ratio of 11.5 per cent. In the past, payout have been above 20 per cent levels. Templeton India Equity Income (4.2 per cent), DSPBR Top 100 (5.7) and Birla Sun Life Buy India (6.7 per cent) were among the funds to make lower dividend payouts. Payout ratio is calculated by dividing dividend declared by the net asset value (NAV) as on on the record date.

Fund managers are finding their hands tied with the latest rules barring them from paying dividends from unit premium reserve. MFs can pay dividends only out of their realised gains now. “Recent regulatory changes on dividends are prompting fund managers to book profits regularly in rising equity markets to distribute dividends,” said Dhirendra Kumar, CEO of Value Research. Any correction, after all, could spoil their chances otherwise. Kumar expects more equity funds to declare dividends in the coming months.

The sales head from a leading fund house said: “Dividends are also a way of targetting new investors.” Even though post dividend declaration, fund NAV falls to the extent of dividend declared, MF investors often tend to get lured by it, by associating higher dividends with better performance. -FE

Source: http://www.indianexpress.com/news/equity-schemes-make-a-dividend-splash-in-sept/687567/0

No comments:

Just click away from joining most active Mutual Fund India google group

Google Groups
Subscribe to Mutual Fund india
Email:
Visit this group

Aggrasive Portfolio

  • Principal Emerging Bluechip fund (Stock picker Fund) 11%
  • Reliance Growth Fund (Stock Picker Fund) 11%
  • IDFC Premier Equity Fund (Stock picker Fund) (STP) 11%
  • HDFC Equity Fund (Mid cap Fund) 11%
  • Birla Sun Life Front Line Equity Fund (Large Cap Fund) 10%
  • HDFC TOP 200 Fund (Large Cap Fund) 8%
  • Sundram BNP Paribas Select Midcap Fund (Midcap Fund) 8%
  • Fidelity Special Situation Fund (Stock picker Fund) 8%
  • Principal MIP Fund (15% Equity oriented) 10%
  • IDFC Savings Advantage Fund (Liquid Fund) 6%
  • Kotak Flexi Fund (Liquid Fund) 6%

Moderate Portfolio

  • HDFC TOP 200 Fund (Large Cap Fund) 11%
  • Principal Large Cap Fund (Largecap Equity Fund) 10%
  • Reliance Vision Fund (Large Cap Fund) 10%
  • IDFC Imperial Equity Fund (Large Cap Fund) 10%
  • Reliance Regular Saving Fund (Stock Picker Fund) 10%
  • Birla Sun Life Front Line Equity Fund (Large Cap Fund) 9%
  • HDFC Prudence Fund (Balance Fund) 9%
  • ICICI Prudential Dynamic Plan (Dynamic Fund) 9%
  • Principal MIP Fund (15% Equity oriented) 10%
  • IDFC Savings Advantage Fund (Liquid Fund) 6%
  • Kotak Flexi Fund (Liquid Fund) 6%

Conservative Portfolio

  • ICICI Prudential Index Fund (Index Fund) 16%
  • HDFC Prudence Fund (Balance Fund) 16%
  • Reliance Regular Savings Fund - Balanced Option (Balance Fund) 16%
  • Principal Monthly Income Plan (MIP Fund) 16%
  • HDFC TOP 200 Fund (Large Cap Fund) 8%
  • Principal Large Cap Fund (Largecap Equity Fund) 8%
  • JM Arbitrage Advantage Fund (Arbitrage Fund) 16%
  • IDFC Savings Advantage Fund (Liquid Fund) 14%

Best SIP Fund For 10 Years

  • IDFC Premier Equity Fund (Stock Picker Fund)
  • Principal Emerging Bluechip Fund (Stock Picker Fund)
  • Sundram BNP Paribas Select Midcap Fund (Midcap Fund)
  • JM Emerging Leader Fund (Multicap Fund)
  • Reliance Regular Saving Scheme (Equity Stock Picker)
  • Biral Mid cap Fund (Mid cap Fund)
  • Fidility Special Situation Fund (Stock Picker)
  • DSP Gold Fund (Equity oriented Gold Sector Fund)