UTI MF launches dividend yield fund

The country's biggest mutual fund, UTI Mutual Fund, on Monday announced the launch of its new scheme 'UTI-Dividend Yield Fund', which will invest in 60-70 high dividend yield stocks.

"The scheme will provide an opportunity to investors to gain from stocks with high dividend yield potential," said D S R Murthy, executive director, UTI Asset Management Company.

The UTI-Dividend Yield Fund is an open-ended equity oriented scheme. "The investment objective of the scheme is to provide medium to long-term capital gains or dividend distribution by investing predominantly in equity and equity-related instruments, which offer high dividend yield," Murthy said.

He said the new scheme has been conceptualised based on the current business climate of corporate earnings growth, which indicates that high dividend yield stocks offer more attractive investment alternatives for sustainable returns.

The average dividend pay out from the companies has moved up from 20 to 25 per cent in financial year 2004.

"This trend will benefit the investors and offer them growth opportunity," he said. The initial offer period of the scheme is from April 11 to May 3, 2005. The scheme will re-open for continuous sales and repurchase from June 1, 2005.

Currently, UTI Asset Management Company manages a corpus of Rs 20,800 crore (Rs 208 billion) through 57 schemes.