Tata dividend yield fund nfo details


Tata Mutual Fund is coming out with a NFO in the form of Tata Dividend Yield Fund.

Tata Dividend Yield Fund as the name suggests would be a dividend yield fund.

The fund would be open for subscription from May 03, 2021 to May 17, 2021.

The fund would thereafter be open for repurchase from May 27, 2021.

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NFO details for Tata Dividend Yield Fund

Scheme Opens


Scheme Closes


Scheme Re-opens


Fund Manager

Mr. Sailesh Jain (Equity)

Mr. Rahul Singh (Equity)

Mr. Venkat Samala (Overseas Securities)

Mr. Murthy Nagarajan (Debt)


Nifty Dividend Opportunities 50 TRO

Minimum Investment (Lumpsum)


Fund Category

Dividend Yield

Exit Load

1% if redeemed within a year


Additional reading: Click Here to read our complete analysis on Dividend Yield mutual funds

Tata Dividend Yield fund would be an open - ended dividend yield scheme that would be predominantly investing in equity and equity related instruments of dividend yielding companies


Tata Dividend Yield Fund Investment Objectives

The investment objective of the fund is to provide capital appreciation and/or dividend distribution  by investing predominantly in equity and equity related instruments of dividend yielding companies

There is no guarantee that the investment objectives of the scheme would be achieved though.


Tata Dividend Yield Fund Allocation

The asset allocation for the fund would be something like this

Asset Class

Minimum %

Maximum %

Equity and Equity Related instruments of dividend yielding companies



Other equity & equity related instruments of companies other than above



Debt and Money market instruments



Units issues by REITS and InvITs




The above figures are only indicative and not fixed, the fund managers have the liberty to move across the asset classes depending upon prevailing market conditions as long as they remain within the mandate permitted.

The fund can also invest in REITs and InvITs if so desired.


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Tata Dividend Yield fund portfolio key characteristics

Quality Businesses

The fund would be on the lookout for companies with:

  1. A sustainable business growth prospect.
  2. A track record of dividend payouts.
  3. Stable cashflows


Contrarian approach 

The fund would be on the lookout for companies:

  1. That are cyclical in nature and have potential for a turn around.
  2. That have potential for improvement in cash flows and higher dividend yield.


Diversified Portfolio

The fund would be fairly diversified.

It would be predominantly heavy on large cap stocks.

Investments in REITs and InvITs can provide stability.

The fund also has the option to invest in overseas markets.

Additional reading: Click Here to read about mutual fund mistakes you should avoid making 


What is a Dividend Yield mutual fund?

A dividend yield mutual fund is a mutual fund scheme that invests in companies that have historically declared dividends perpetually for a long time.

Therefore, by default it means these mutual fund schemes invest in companies with strong balance sheets, highly efficient management and a robust functioning in place.

This is because a company can only declare high dividends only if it makes good profits and it can only make good profits when it satisfies all the qualifications mentioned above.

It is not enough that these companies pay high dividends consistently to qualify for a dividend yield mutual fund, they also need to have a high dividend yield.

The fact that the fund has to invest in a particular set of stocks, makes the job of the fund manager easier considering his choices are limited anyway.

A dividend yield fund is not one that pays dividends regularly, it is one that invests in companies that pays dividends regularly.

The name of the fund denotes the approach of the fund rather than a willingness or potential to pay dividends.


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What does Dividend Yield mean?

Dividend Yield is the dividend paid per unit divided by the market price.

It is the ratio of past paid dividends to the market price per share.

This includes both partial and full dividends.

Companies that pay dividends usually do so annually and then there are some who may even do so more than once in a year.

A dividend yield ratio most importantly takes into account the price of stock of the company.

If the stock price of a company is low for whatever reasons but it has a good history of pay dividends regularly then it would be preferred over a company with a high price and having a good track record of paying dividends.


Advantages of Dividend Yield mutual funds 

A dividend yield mutual fund would by default only be investing in quality stocks.

This is because only quality companies would be in a position to declare dividends on a regular basis.

This therefore means that the portfolio is only built with quality stocks.

Since the portfolio is made up of quality companies, it helps the fund to counter volatility which is a given with equity investing.

These funds provide a better risk reward for a medium to long term horizon outlook.



Disadvantages of Dividend Yield mutual funds

The portfolio of such funds is restricted in terms of their choices.

They can only invest in stocks of companies that have a high dividend yield ratio.

Therefore, their hands are tied when it comes to portfolio diversification.

These funds are not restricted with regards to caps be it large cap, mid cap or small cap.

There is a possibility then that these funds could allocate a higher proportion to mid and small cap companies.

Mid and small companies tend to fall the most in a volatile market.

The fund manager would be going with stocks of companies with a high dividend yield, irrespective of the cap.

Mid and small cap mutual funds need to be well diversified so as to face volatile times efficiently but that cannot be the case here since the fund manager’s choices are limited.

He/she can only pick mid and small cap companies with a high dividend yield ratio.


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Disclaimer : While due precaution has been undertaken in the preparation of this article, The Mutual Fund Guide or any of its authors will not be held liable for any investments based on the above article. The above article should not be considered financial advice and has been published only for your perusal. Due credit has been given in case wherever required, in case you feel any part violates any rights then do get in touch with us and we shall get it duly removed.  
Mutual Fund investments are subject to market risks. Please read the offer document carefully before investing

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