At the current NAV of Rs 27.54, the dividend yield works out to around 10.9 per cent. This is the second instance of the mutual fund declaring a high pay out for its equity scheme. Last month the fund had declared a divident of Rs 4 per unit in its IT fund.

Prima Fund invests in small and mid-cap stocks with focus on smaller companies that are under-researched, financially sound and can deliver returns across business cycles.

Prima Fund's top ten holdings as on September 30, 1999 were: Mastek, Torrent Pharma, Mico, Crest Communication, MRF, German Remedies, BFL Software, Siemens, Birla 3M and Synergy Login. Sector-wise, IT accounts for 23.19 per cent, pharma 18.50 per cent, auto 11.06 per cent, engineering 10.53 per cent and FMCG 5.53 per cent.

The fund decided to declare the dividend as it had recorded over 40 per cent compounded annual growth in the last three years. According to its fund manager K N Siva Subramaniam, ``Small and medium sized companies experience a much higher growth rate compared to large companies. We try to identify scrips with the following characteristics: turnaround and restructuring stories, niche market dominance and under-researched hidden jewels.''

With the dividend in Prima Fund Kothari Pioneer has declared dividends in all the four open-end funds. KPMF has Rs 850 crore in equity assets under management with over 3 lakh investors.

Kothari Pioneer's IT Fund has already gone ex-dividend and the dividend plan's NAV is quoting at Rs 36.86.