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Details Of UTI Dividend Yield Fund:

UTI Dividend Yield Fund:

In recent days, inquiries about dividend yield funds are on rise.Do not know exactly but investors may want to take partial money back received through dividends.

Dividend yield funds invests generally in high dividend paying stocks.

As per current tax laws dividend received are tax free.Even if you receive dividend on second day of your application,you need not to pay any tax,unlike to withdrawal within 0ne year from equity mutual funds where short term capital gains are applicable.As per proposed Direct Tax Code (DTC),there will be tax of 5% on dividend (do not know whether it will payable by mutual fund directly  or payable by investors or its anything else..)

We take view of few dividend yield funds and take a view of UTI Dividend Yield Fund

Suppose, Rs.5,00,000 invested in UTI Dividend Yield Fund in April 2005:

Tax Free Dividends received :

Rs.35,000/- Oct.2005 7%
Rs.35,000/- Feb.2006 7%
Rs.30,000/- Aug 2006 6%
Rs.40,000/- Dec.2006 8%
Rs.35,000/- Mar.2007 7%
Rs.40,000/- June 2007 8%
Rs.40,000/- Sept 2007 8%
Rs.40,000/- Jan 2008 8%
Rs.35,000/- May 2008 7%
Rs.20,000/- May 2009 4%
Rs.25,000/- July 2009 5%
Rs.25,000/- Nov 2009 5%
Rs.25,000/- Mar 2010 5%
Rs.25,000/- July 2010 5%
Rs.35,000/- Dec.2010 7%
Rs.25,000/- May 2011 5%
Rs.20,000/- Nov.2011 4%

Total Tax Free Dividend Received Till On Investment Of Rs.5 Lakh:5,30,000/- 

Performance of UTI Dividend Yield Fund:

Actually Invested


Present Value :

Dividend Option Rs.6,48,000/-

Total tax free dividends received:Rs.5,30,000/-.

PV under Growth Option:Rs.15,62,000/-

Present value if invested same capital in sensex:Rs.12,78,000/-

One can view that overall fund performance is good.But dividends should not be aim of investing in these funds...Fund manager may have choice to invest in quality stocks of all sized stocks where company is interested in sharing of the profits with investors ..General observations is that such funds do show resilience in following conditions and have shown better performance in bad days of the market,in that sense one may think to have one dividend yield mutual fund in the portfolio.


Category: Mutual Funds


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