VR Logo

Decent Beginning

Tata Dividend Yield Fund has done reasonably well so far. But only time will tell whether the fund has the potential to live up to its conservative strategy during the tough times

Tata Dividend Yield Fund was launched in October 2004, close on the heels of Principal Dividend Yield Fund. Although this fund has also been a laggard in the category, like other dividend yield funds, but it has reasons to cheer upon the fact that it has performed better than other funds with the similar strategy. The fund has a trailing one-year return of 41.74 per cent as on March 3, 2006.

Though it is less than the category's 58.11 per cent, but out of the three dividend yield funds which have a one year history, Tata Dividend Yield returns is comparable with the best.

The portfolio is dominated by the mid- and small-cap stocks, which currently account for nearly 65 per cent of the equity assets. At 22.39 per cent, the exposure to small-caps is quite high.

The portfolio is well-diversified sectorally. At the stock level, the funds maintains a portfolio of around 50-55 stocks, with any one of them barely crossing 6 per cent.

Like other dividend yield funds, Tata Dividend Yield also looks unattractive in a market dominated by the bulls. But only time will tell whether the fund has the potential to live up to its conservative strategy during the tough times.