Tata Dividend Yield Fund NFO

Tata Mutual Fund has announced the launch of the Tata Dividend Yield Fund. The fund is an open-ended equity scheme that will be investing in dividend-yielding stocks.

The New Fund Offer (NFO) starts on 03rd May 2021 and will end on 17th May 2021. The fund will reopen for continuous sale and repurchase on or before 27th May 2021.

Investment Objective 

The investment objective of the scheme is to provide long-term capital growth by investing its assets in equity and equity-related securities of dividend-yielding stocks.

Features

• The Fund will be investing at least 65% of its assets in equity or equity-related securities of dividend-yielding stocks.
• The fund may invest a portion of assets in other equity and equity-related securities.
• The fund may also give exposure to the money market & debt instruments and units of REITs & InvITS.
• The fund will invest its assets in a diversified portfolio of quality stocks.

Dividend Yield

• Dividends are a common way to share profits with the shareholders.
• Dividend yield shows how a company has paid dividends each year in respect of its stock price.

Dividend Yield = Annual Dividend per share / Price Per share

Investment in dividend yield companies

1. Quality companies: The companies that have a high cash flow, stable operational & financial structures.
2. Return enhancement: These companies give periodic returns in form of dividends along with capital appreciation through rise in stock price.
3. Stable business models: The companies which pay a dividend, have confidence about the sustainability of earnings and therefore consistency to pay dividends.
4. Lower volatility of share prices: The companies which have high dividend yield tend to show lower volatility during underperforming markets.

Why invest in Tata Dividend Yield Fund?

• The fund will prefer to invest in stocks that have a dividend yield higher than the dividend yield of Nifty 50.
• The fund will actively look to participate in the journey of the stocks from contrarian to consensus.
• For the contra to a consensus approach, the fund will pick out of favor stocks, turnaround, or re-rating potential companies.
• The fund gives the opportunities to invest in overseas securities and a stable income from the investments in InvITs and REITs.
• The fund will invest in a diversified portfolio of quality stocks that have stable business models.

Who Should Invest?

This scheme is suitable for investors who are -

• Interested in long-term capital growth.
• Investors looking for a diversified portfolio of dividend-yielding stocks of fair valuations.
• Interested in investments in a portfolio of relatively stable & rich cash flow stocks.
• Recommended for investors with an investment horizon of 5 years & above.

Asset Allocation Pattern

About the scheme