``The reinvestment of dividend will help investors claim tax-breaks on investments made while there will no outflow of money from the fund. The introduction of a fortnightly dividend is aimed at giving tax-efficient returns to corporates, banks and other large-ticket investors on their treasury funds,'' said a senior official of the AMC. ``There is a tremendous response from our existing investors on our plans for giving as fortnightly dividend. We also expect fresh money to come in as the plan has become tax-efficient,'' he added. The budget for fiscal 2000 had made dividend from mutual funds tax-free in the hands of investors. With twice-a-month payouts, a portion of investments from largeticket investors will be made tax-free.

However, being a debt fund, Birla Cash Plus will have to pay a dividend tax of 11 per cent. The dividend tax payout will be factored in the net asset value. The impact of dividend tax outflow twice a month on the NAV remains to be seen.

As on September 14, the fund had a net asset value of Rs 12.30 with a corpus of Rs 268 crore. In the last quarter, the fund has given a yield of a little over 9 per cent to investors. As on August 31, the fund had 50.65 per cent of its portfolio at call while money market investments accounted for 15.07 per cent. The remaining corpus is invested in 10 debt instruments with Ranbaxy the top investment with a weightage of 10.84 per cent followed by ICICI at 8.7 per cent. The other instruments include Telco, GE Capital, Nicholas Piramal, Tata Finance, Ashok Leyland Finance, etc. Corporate debt accounts for 29 per cent of the portfolio.