UTI Mastershare Unit Scheme is India’s first equity-oriented scheme with its inception date being October 15, 1986.
There’s a good news for the unit holders of UTI Mastershare Unit Scheme, an equity oriented mutual fund. UTI AMC has declared dividend of of 26 per cent (Rs.2.60 per unit on face value of Rs.10) under dividend option-regular plan and dividend (gross distributable amount) of 15 per cent (Rs1.50 per unit on face value of Rs.10) under dividend option –direct plan. Incidentally, UTI Mastershare Unit Scheme is India’s first equity oriented scheme with its inception date being October 15, 1986.
The dividend is declared on the gross distributable amount and will be subject to the availability of distributable surplus as on record date. The record date for the dividend is October 17, 2019 and all existing and even new investor as on the record date will be eligible for the dividend. The actual dividend payout to the mutual fund (MF) investor will be lower to the extent of Dividend Distribution Tax.
UTI Mastershare has a track record of 33 years and according to UTI AMC, the scheme has uninterrupted dividend distribution across all market cycles in addition to bonus and rights offered to the investors.
This scheme is an open ended equity scheme having a corpus of Rs.6133 crore (as on September 30, 2018) and around 5.99 lakh investor accounts (as September 30, 2019). UTI-Mastershare Unit Scheme is a Large Cap Fund with S&P BSE 100 as the benchmark.
Being a large cap scheme, the objective of the scheme is to generate long term capital appreciation by investing predominantly in equity and equity related securities of large cap companies.
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The fund is over 86 per cent exposed to equities with nearly 45 per cent in financial services. The portfolio of UTI Mastershare Unit Scheme includes HDFC Bank, ICICI Bank, Infosys, Tata Consultancy Services, HDFC Ltd, Axis Bank, Larsen & Toubro Ltd, Bharti Airtel Ltd, Kotak Mahindra Bank, Tech Mahindra Ltd etc. Overall, the scheme is currently overweight on private sector banks, Information Technology, Industrial Manufacturing and underweight on Energy, Financial Services and Consumer Goods.
The NAV of UTI Mastershare Unit Scheme on October 11, 2019 under dividend option-regular plan was Rs.31.7537 and under dividend option-direct plan was Rs.33.4266. Unlike in equity shares, where dividend is paid out of the profits generated by the company, the dividend in mutual funds is out of scheme’s NAV. After the payment of the dividend, the NAV of the dividend option-regular plan and dividend option-direct plan of the scheme will fall to the extent of the payout. Receiving dividend is akin to redeeming units. Its better to choose the growth option for long term investing in MFs as it also saves dividend distribution tax which the fund house deduct before paying dividends.