Home | Register | Sign in | Contact Us | Sitemap |
   
09 Dec 2011 10:20 AM
Dividend Yield category outshines Equity Diversified category 
Swapnil Suvarna
 

Dividend Yield category has offered better protection in a volatile market environment. The category in the last one year has outperformed the relative benchmark index by 6 percent while the diversified category has managed only 2 percent outperformance

The Dividend Yield fund category has been able to generate better returns against the benchmark index and the equity diversified category across various periods. Over the last five years, dividend yield fund category has generated an alpha (outperformance of index) of 8 percent whereas equity diversified category has managed an alpha of 1 percent. The Dividend Yield category during the last four and three years out-beat the diversified category significantly by generating an alpha of 9 percent and 7 percent respectively. Traditionally, higher dividend equities have offered better protection in a volatile market environment.

According to Dominic Rossi, CIO - Equities, Fidelity Global, “The dividend income offers a measure of protection to investors against market volatility. These companies are typically large, robust household names which may well prove to be a relatively safe place for investors when you see mounting stresses in the banking system.”

Dividend Yield fund performance

According to him, investors should focus on high-quality, defensive companies with stable and reliable earnings streams which pay high and sustainable dividends. Dividend Yield funds primarily invest in equities that boast good dividend yield and have sustainable operating cash flows with low leveraged financial statements. On the other hand, equity diversified funds predominantly invest in companies across various market capitalization and sectors. Dividend Yield funds classically do well during periods of market volatility and correction.

 
|
|
|
|
|
Cafemutual welcomes your comments. Any disagreements or criticisms must be expressed in a dignified manner. Thank you.
blog comments powered by Disqus
 
Related Articles
NFO mobilisations reduced to a trickle since 2010
9 Indian funds among world’s 100 best performing funds in 2012: Lipper
Global funds yet to catch advisors fancy – Part II
Global funds yet to catch advisors fancy – Part I
Mid Cap Funds stood out in 2012: Morningstar
18% decline in Indian millionaires compared to last year, says a Capgemini-RBC study
Three interesting AMC websites which distributors will find useful
Study claims US fund managers get worse with experience; owe their skill to luck
Active Funds vs. ETFs - which is better?
Are changes fast paced?
 
About Us | Media | Advertise With Us | Editorial Policy | Contact Us | Privacy Policy | Disclaimer | Sitemap
© Cafemutal.com. All rights reserved. Reproduction of news articles, photos, videos or any other content in whole or in part in any form or medium without express written permission of cafemutual.com is prohibited.
Best Viewed in I.E 7.0 and above. Resolution: 1024 * 768. Developed & Hosted by Accord Fintech Pvt. Ltd