Friday, June 19, 2009

Equity mutual funds dole out dividends

Equity schemes are giving back goodies to their investors. In the last one month, more than 30 equity schemes have declared dividends up to 40%, with schemes from SBI MF, Principal MF, UTI MF and Sundaram BNP Paribas MF leading from the front.
After a disappointing performance in 2008 due to the stock market downturn, around 100 equity funds have gained over 50% in the last six months helping asset management companies to share profits with investors.
By declaring dividend, fund houses hope to reward patient investors as well as attract new investors as the sentiment surrounding the stock market improves, say experts. Down in the dumps at around 8,000-point level in March, the benchmark sensex has now risen to 15,000-point level in a matter of 3 months helping equity funds to gain from their investments.
Principal MF has recently approved the declaration of dividend under Principal Emerging Bluechip Fund - Dividend Option for which June 19 is the record date. The quantum of dividend is 40% or Rs 4 per unit. SBI Magnum Tax Gain, one of the oldest schemes in the country, has declared 28% dividend i.e. Rs 2.80 per unit on the face value of Rs 10 for the open-ended equity linked savings scheme.
UTI Mutual Fund has also announced dividends in its three open-end equity schemes - UTI Master Value, UTI Mid Cap and UTI Transportation and Logistics. The quantum of the declaration under all the schemes is 20% or Rs 2 per unit. Others such as Sundaram BNP Paribas CAPEX Opportunity Fund - Dividend Option, FT India Balanced Fund - Dividend Option, DSPBR India T.I.G.E.R. Fund - Regular Plan have all declared 20% dividends.
While equity mutual fund schemes do pay dividends, fund-houses for the last few months had to wait for sometime before rewarding investors. "If we look at the market performance even five months ago, it was not great. But after this remarkable recovery in markets, it became easier for fund-houses to pay out dividends.

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