Thanks to the boom in the equity markets over the last few months, fund houses are seeing it as an opportune moment to make their investors happy by announcing dividend declarations.
Close to the heels of these declarations, Franklin Templeton Investments (India), one of the largest fund houses in the country has announced its eleventh tax-free dividend in its open-end diversified equity fund -- Franklin India Prima Fund.
The quantum of the dividend would be Rs 6 per unit, or 60 per cent on the face value of Rs 10.
All those investors who have been registered in the dividend plan on or before the record date, June 24, 2009, will be able to receive this particular tax free dividend. Pursuant to the payment of dividend, the net asset value (NAV) of the fund would fall to the extent of the payout.
There have been around 31 dividend declarations in diversified equity funds so far this year. Surprising, as it may sound, 17 of them have been declared after May 17, 2009 when the equity markets suddenly jumped up as a result of the Congress-led UPA coalition registering a thumping victory for the second term in a row.
There would also be one day book closure in the growth and dividend plans and the fund will reopen for outgoing purchases and redemptions on June 26, 2009.
Under the dividend reinvestment plan, the dividend declared will be reinvested in the fund at the NAV of June 26, 2009 and unit holders will be allotted additional units for the dividend amount.
Franklin India Prima Fund was launched in November 1993 and currently has Rs 645 crore of assets under management (AUM). Since its inception, the scheme has been able to deliver 20.14 per cent returns.
However, it has failed to beat the stock market indices. In the current calendar year, the fund has returned 46.05 per cent against 50.54 per cent by BSE Sensex and 52.64 per cent by S&P CNX 500 against which the fund is benchmarked.
Franklin Templeton is one of the largest private sector fund houses in the country with over Rs 23,795 crore of average AUM from over 25 lakh investor accounts (as of May 29, 2009).