Seven out of 195 open-ended equity funds that declared dividends in 2014 have offered significantly higher dividends under their regular plans. The difference between the dividends declared under regular and direct options in some schemes was as high as 100 per cent. However, only five schemes, primarily from Religare MF, have declared more dividends under their direct plans during the same period. But the difference in payout between the direct and regular options was modest in comparison. So, does this mean that regular plans pay more dividends?
Not really. A closer look at these things reveals that schemes that declared huge dividends under their regular plans have been around for a long time and they also had large corpuses. That could explain why they could afford to be generous in their payouts. Two, direct plans in comparison have been around only since 2013 and they may not have huge realised gains to distribute among investors.
Mutual funds can pay dividends only out of realised gains. Funds used to pay dividends from their premium reserves earlier, but Securities and Exchange Board of India (SEBI) in March 2010 has asked them to pay dividends only from the reaised gains made on their portfolio.
|Name||Date of Dividend||Direct||Regular||% change|
|ICICI Pru Top 100||17/04/2014||10||15||50|
|IDFC Imperial Equity||29/01/2014||9||12||33.33|
|Principal Dividend Yield||30/12/2014||27.4||32||16.79|
|BOI AXA Equity||18/12/2014||50||70||40|
|ICICI Pru Top 200||31/10/2014||10||20||100|
|DSPBR Top 100 Equity||03/03/2014||9||19||111.11|
|Motilal Oswal MOSt Focused 25||24/11/2014||11.2||10.9||2.68|
|Principal Large Cap||30/12/2014||36.9||35.7||3.25|
|Religare Invesco Business Leaders||28/11/2014||22||20||9.09|
|Religare Invesco Equity||28/02/2014||20||15||25|
|Religare Invesco Mid N Small Cap||08/08/2014||25.5||25||1.96|