The fund manager will look to build a diversified portfolio of companies present across sectors and market cap.
The scheme will invest predominantly in stocks of dividend-yielding companies.
HDFC AMC has launched HDFC Dividend Yield Fund, an open-ended equity fund that aims to invest predominantly in stocks of dividend-yielding companies with a preference for companies that have a consistent track record of paying dividends at the time of investment and companies having dividend yield higher than Nifty 50 index. The New Fund Offer is open since November 27, 2020, and closes on December 11, 2020.
The Fund will be market cap and sector-agnostic. The dividend yield is a good valuation indicator and companies that have high dividend yield represent good cash flow in business and management commitment towards shareholders. Also, such companies have a higher Return on Equity (ROE). The dividend yield is a financial ratio that shows how much a company pays out in dividends/buyback each year relative to its stock price.