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To invest in fundamentally sound companies with a dividend yield of at least twice the Sensex yield. The fund has flexibility to invest up to 35 per cent in companies facing special situations like de-merger, buy-backs, open offers. However, the same is used very selectively with focus on minimizing downside risk. Dividend paying companies usually have healthy free cash flows, steady earnings growth and a strong balance sheet. This results in steady stock returns over the long term while providing relatively better downside protection in case of market correction. The strategy of investing in a dividend yield stock at times becomes a contrarian one as undervalued or out-of-favour stocks also offer higher dividend yield. Tactically, we are focused on segments of the market which are dependent on mainly domestic economy / developments. The fund has held significant positions in banking, FMCG, Fertilizers, oil and gas (policy related).
Its downside protection capabilities have proved that the fund gains ground by not losing it in the first place. One would expect this trait from a dividend yield fund, but it's surprising when one considers the high mid- and small-cap allocation. This gives it a risky bent but Sancheti balances it by staying away from aggressive bets and has even increased the number of stocks over time. Historically, the fund has not been a bull-market standout. But over the long term it proves to be a worthy bet
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Download Mutual Fund Application Forms
Some of the Top performing Mutual Funds are
- HDFC Top 200 Fund
- ICICI Prudential Dynamic Plan
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- IDFC Premier Equity Fund
- SBI Magnum Contra Fund
- Sundaram Select Midcap
- UTI Dividend Yield Fund
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