Equity MFs back on dividend list

The current run-up in the equity market has brought equity funds back on the dividend list after a lull of about four months. With the Sensex seeing one of its steepest falls in recent times to 4505.05 on May 17, equity funds across the board had reported a sharp fall in their net asset values (NAVs).

The current rally, led by mid-cap stocks, has gradually progressed to large-caps, pushing the Sensex above the 5,600 levels last seen in May 2004. Some of the funds, which used the downturn in the market to pick up quality stocks at bargain prices, have seen their NAVs appreciate substantially in the last four months. And for a few of them, it could not have been a more appropriate time to reward their unitholders with dividends when the mood in the equity market is upbeat.

Pankaj Razdan, managing director, Prudential ICICI Mutual Fund said, "It is our funds' philosophy to give out dividends on a continuous basis whenever gains are seen." Prudential ICICI Mutual fund is planning on a dividend pay-out in its equity schemes soon.

According to data sourced from MutualFundsIndia.com, the first off the block was Deutsche Alpha Equity Fund which declared a 15 per cent dividend on August 19. It was followed by Sundaram Select Focus Fund which declared a 40 per cent dividend on August 20. Some of the other funds to have declared dividends include the Sundaram Select Midcap which declared a 20 percent dividend on September 17.

Tata Mutual Fund has declared dividends for its Equity Opportunities Fund and Growth Fund in a span of nine days.