Baroda BNP Paribas Mutual Fund is launching a new thematic fund in the equity category called the Baroda BNP Paribas Dividend Yield Fund.
This new fund offer (NFO) will start on August 22 and remain open for subscriptions until September 5, 2024.
It is an open-ended equity scheme focused solely on investing in dividend-paying stocks.
The fund aims to grow investor wealth through both stock price appreciation and dividend income.
The goal is to invest in companies that regularly pay dividends and exhibit consistent growth.
Investment Details
You can start investing in the Baroda BNP Paribas Dividend Yield Fund with a minimum investment of ₹1,000.
The scheme’s benchmark index is NIFTY 500 TRI. The fund manager for this scheme is Shiv Chanani. Note that there will be a 1% exit load if you redeem your investment within one year.
Investment Strategy
The fund targets companies with high free cash flows and a history of regular dividend payments.
It uses a five-step selection process to build a portfolio of reasonably valued companies across various market capitalizations while avoiding firms that rarely distribute dividends.
CEO Insights
Suresh Soni, CEO of Baroda BNP Paribas AMC, highlights that, based on a study of Nifty 500 components since FY 2020, dividend-paying companies have shown higher average returns on equity (ROE) compared to non-dividend payers.
In FY 2024, dividend-paying companies had an average ROE of 20.5%, while non-dividend payers had an average ROE of 13.4%.
The fund aims to invest in high-quality businesses with management practices that are favorable to shareholders.
