Dividend Stocks-Focused New Fund Launch by Baroda BNP Paribas
Baroda BNP Paribas Mutual Fund has launched a new fund, the Baroda BNP Paribas Dividend Yield Fund. It will be an open-ended equity scheme whose goal is to invest in companies that are regular dividend payers, thereby aiding in the creation of wealth by way of capital appreciation and dividend yield.
The fund will invest in companies offering dividends and in those companies that show steady growth. The firm said in a press release that it will eye firms with dependable and stable cash flows. The companies are run by management teams that have focused on creating value for shareholders through regular dividends.
It will adopt a very structured five-step process for selecting the right investments, striving to build a broadly diversified portfolio that includes companies of all sizes. It will avoid companies that might apparently offer good dividends but carry risks that could end up yielding poor returns.
According to Suresh Soni, CEO of Baroda BNP Paribas AMC, the ROE of companies paying dividend yields is normally at a premium to companies that do not pay dividends. For instance, in FY 2024, the average ROE for companies paying dividends was 20.5%, while for non-dividend-paying companies, it was 13.4%.
Key things to know about the Baroda BNP Paribas Dividend Yield Fund:
1. Scheme Name: Baroda BNP Paribas Dividend Yield Fund
2. Launch Period: The fund shall remain open from August 22 to September 5, 2024.
3. Investment Objectives: The fund will endeavour to invest in firms having stable and predictable cash flows managed by those rewarding shareholders through regular dividends. This targets companies with growth characteristics that return value to investors through dividends and buybacks.
4. Type of Scheme: Open-ended equity scheme.
5. Fund Manager: The fund shall be managed by Shiv Chanani.
6. Benchmark: NIFTY 500 – TRI.
7. Minimum Investment: An investor can start with a minimum investment of Rs 1,000. Further investments can be made in multiples of Re 1. The minimum amount in respect of daily, weekly and monthly SIPs shall be Rs.500.
8. Exit Load: If Units are redeemed or switched out, upto 10% within one year from the Date of Allotment, there will not be any exit load. In case more than 10% of units are redeemed within one year, an exit load of 1% shall be charged. There will not be any exit load if units are redeemed after one year.
Conclusion
This new fund offers an opportunity for investors in companies that have consistently provided dividends with potential capital growth.
