Improved Stanlib Dividend Income Fund offers better yield in current market volatility

STANLIB asset management has made significant changes to the STANLIB Dividend Income Fund which will now pay out monthly distributions as of October 2008.

In addition, the unit price will reset to 100 cents after each distribution, resulting in a removal of capital fluctuations other than the accrued distributions.

Due to the tax nature of the distributions, the capital preservation and the attractive yields which they offer, dividend income funds have become extremely popular over the last few years, attracting net flows of R34bn across the industry.

“We have made these changes in response to our clients’ needs,” says Mike Galloway, Director of Retail Investing at STANLIB. “We have listened to our clients and adjusted the features of the fund accordingly. The STANLIB Dividend Income Fund reduces uncertainty at a time when investors are struggling to keep abreast of the volatile global markets. Over R300m has already been committed this week and we will cap the fund at R5bn, and review our options at that stage.”

The underlying investments in the fund are rated preference shares with approximately 7.5% of the fund invested in cash for liquidity.