Tata Mutual Fund launches Tata Dividend Yield Fund

Tata Mutual Fund has announced the launch of Tata Dividend Yield Fund, an open-ended equity scheme predominantly investing in dividend yielding stocks. The NFO will be open for subscription till May 17. The investment objective of the fund is to provide capital appreciation and dividend distribution by predominantly investing in a well-diversified portfolio of equity and equity related instruments of dividend yielding companies.

The fund will be managed by Sailesh Jain, Fund Manager at Tata Asset Management. The press release said that there is no assurance or guarantee that the investment objective of the Scheme will be achieved. The scheme does not assure or guarantee any returns.

“Nifty FY22 PER at ~20x is in the fair value range after factoring in the robust earnings recovery in the medium term coupled with low interest rates. However, given the evolving macro risks to earnings at the current valuation, volatility is here to stay in the short term. With such a backdrop of earnings, low interest rates and better prospects for the domestic cyclicals, we are introducing a fund which would give an opportunity to earn regular dividend with capital appreciation,” said Rahul Singh, CIO-equities, Tata Asset Management.

“Tata Dividend Yield Fund portfolio would largely consist of companies paying dividends higher than the market. This Fund would therefore provide a healthy mix of both Stable Growth companies and Value segments of the market. Our analysis of past data suggests that high dividend paying companies generally provide greater protection during market volatility and generate gains that are in line with the broader market when the market stabilizes. In addition to the stable & growing companies paying dividend, we may identify and include out-of-favor dividend paying,” said Sailesh Jain.

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