DSP Mutual Fund seeks SEBI approval for a new high dividend yield scheme investing 65% in high-yield stocks, benchmarked to Nifty 500 TRI.
DSP Mutual Fund is preparing to introduce a new investment scheme focused on high dividend-yield stocks, aiming to attract medium- and long-term investors looking for consistent dividend income. According to sources, the fund house has already submitted essential documents to SEBI for approval.
The scheme will use the Nifty 500 Total Return Index as its primary benchmark. DSP has announced that at least 65% of the scheme’s assets will be invested in stocks with high dividend yield, making it an attractive option for investors seeking steady cash flow rather than purely capital appreciation.
This will be an open-ended scheme, allowing investors to buy or sell units at any time. The exit load is set at 1% if redeemed within 12 months; after that period, investors can redeem their units without any charges. However, the scheme does not promise guaranteed returns, in line with SEBI guidelines.
What Is Dividend Yield?
Dividend Yield (%) = Dividend per Share / Share Price
This ratio indicates how much an investor earns annually from dividends relative to the share price. Professional fund managers often use high dividend yield as a strategy to identify stable income-generating stocks.
FAQ
1. What type of fund is DSP launching?
A high dividend yield equity fund focusing on income-generating stocks.
2. Has SEBI approved the scheme yet?
The documents have been submitted; approval is pending.
3. What is the benchmark for this fund?
Nifty 500 Total Return Index (Nifty 500 TRI).
4. How much will the fund invest in high dividend stocks?
At least 65% of total assets.
5. Is the scheme open-ended or close-ended?
It is an open-ended scheme.
6. What is the exit load policy?
1% exit load if redeemed within 12 months; no load afterward.
7. Does the fund guarantee returns?
No, it offers no assured returns.
8. Who might benefit from this fund?
Medium- and long-term investors seeking dividend income.
9. What does dividend yield represent?
The annual dividend received relative to the share price.
10. Why do fund managers prefer high dividend yield stocks?
They often signal stable companies with regular cash payouts.
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