UTI eyes Rs 1000 cr from Div Yield Fund

The Unit Trust of India (UTI) expects to mop up around Rs 1,000 crore from its newly launched 'UTI-Dividend Yield Fund'.

"The investment objective of this fund is to provide medium to long term capital gains by investing predominantly in equity and equity related instruments, which offer high dividend yield," said A K Sridhar, chief investment officer, UTI.

The initial offer period for the scheme is from April 11 to May 3, 2005. It will reopen for continuous sale and repurchase from June 1 2005 onwards. The face value of units is Rs 10 and the minimum initial investment is Rs 5,000.

Commenting on the specification of the fund, Sridhar said it would not keep more than 10 per cent cash on a daily basis as the market is volatile. However, the fund has the freedom to keep a large amount of cash in the first six months.

Advocating the high dividend yield scheme, he said that it offers 65 to 100 per cent returns where as other investment schemes give only 0 to 35 per cent return.

"The average dividend pay out from companies has moved up from 20 per cent to 25 per cent in financial year 2004. This trend will benefit investors and offer them a growth opportunity," said Rajesh Bhojani, executive of UTI.