Baroda BNP Paribas Dividend Yield Fund :If you are looking to invest in a new mutual fund scheme, then this is a good opportunity. Baroda BNP Paribas Mutual Fund has announced the launch of Baroda BNP Paribas Dividend Yield Fund. It is an open-ended equity scheme that invests primarily in dividend-paying stocks. This New Fund Offer (NFO) opened on 22 August and will remain open till 5 September 2024.
Investors benefit in 2 ways
As the name suggests, this scheme will invest in strong companies that pay regular dividends and show consistent growth. Investors in this scheme will have a diversified portfolio of dividend paying companies. This type of investment increases the wealth of investors in two ways. One is in the form of equity returns due to the rise in the stock price and the other is through income from dividends.
Mutual Funds Return: 5 schemes with highest returns in 3 years, all doubled the money, growth up to 187%
About the Scheme
Baroda BNP Paribas Dividend Yield Fund aims to invest in companies with predictable and stable cash flows, led by management that prioritizes rewarding shareholders with regular dividends. The investment strategy is to invest in growth companies that are increasing investors’ wealth through regular dividends and buybacks.
Investing in stocks of all market caps
The fund will invest in companies with high free cash flows and a history of regular dividend payments. The fund follows a 5-phase selection process to create a portfolio of companies with attractive valuations across market caps, while avoiding companies that rarely pay dividends.
Small Cap Return: Smallcap scheme is amazing, you get full 1 crore from SIP of 2000 rupees, superhit in every phase of 3 years, 5 years or 10 years
What is the minimum investment required?
In this scheme, a minimum of Rs 1000 is required for lump sum investment. After which you can invest any amount in multiples of Rs 1. Whereas for SIP, a minimum monthly investment of Rs 500 is required, after which you can invest any amount in multiples of Rs 1.
Key features and benefits of the scheme
Higher Free Cash Flow : Dividend-paying companies have higher free cash flow, which in turn has a positive impact on their share price.
Promoter alignment : The promoters benefit the shareholders by giving them dividends shows their engagement with the minority shareholders.
Diversification :The fund benefits from diversification across different sectors and market capitalizations, reducing risk and increasing potential returns.
Midcap Funds Return: 5 midcap schemes that gave the highest returns in 5 years, all of them multiplied the money at least 3 times
An eye on performance
In 10 out of 16 years since FY 2009, Nifty Dividend Opportunity 50 TRI has outperformed the Nifty 500 TRI index. If one had invested Rs 1 lakh in Nifty 500 TRI in October 2007, it would have grown to Rs 6.7 lakh now. Whereas Rs 1 lakh invested in Nifty Dividend Opportunity 50 TRI in October 2007 would have grown to Rs 10.4 lakh by July 31, 2024.
(Source: NSE and Internal Research. Past performance may or may not be sustained in future)
NFO should be like this, HSBC Multi Cap Fund became the rising star of the market, 1.5 year old scheme gave 85% return
Better returns in dividend paying companies
Suresh Soni, CEO, Baroda BNP Paribas AMC, says that according to a study of Nifty 500 constituents since FY20, dividend paying companies have higher average return on equity than non-dividend companies. In FY24, the average ROE of these dividend paying companies was 20.5%, while the average ROE of non-dividend paying companies was 13.4%. The fund aims to invest in a portfolio of high quality businesses with shareholder-friendly management practices.
(Data as of March 31, 2024. *Source: Ace Equity and Internal.)
Baroda BNP Paribas Dividend Yield Fund will be managed by Shiv Chanani, an expert with over 24 years of experience, who is a Senior Fund Manager – Equity at Baroda BNP Paribas AMC.
