FREQUENTLY ASKED QUESTIONS

ABOUT THE SCHEME

1. What is SBI Dividend Yield Fund and how is it different from other equity-oriented schemes of SBI
Mutual Fund?

SBI Dividend Yield Fund is an open-ended equity fund with an objective to invest predominantly in a
well-diversified universe of companies with – a) attractive dividend yield & b) companies poised for
dividend growth. The endeavour of the fund is to generate aggregate dividend yield that is at least 50%
higher than that of the Nifty 50 Index.

The fund will predominantly invest (minimum 65%) in dividend yielding companies spread across
market capitalization. The fund will not have any sector or style bias. These factors differentiate the
fund from some of the other open-ended equity schemes having specific market cap or sector
mandates.

For detailed asset allocation, please refer Scheme Information Document.

2. What is meaning of Dividend Yield?

Dividend Yield is a financial metric that measures the aggregate value of dividends per share paid by
the company to its shareholders during the year relative to its current market price per share. However,
it’s important to understand that the dividend yield of stock can change over time either in response
to market fluctuations (i.e. price changes) or as a result of quantum of future dividends declared by the
company.

Exhibit 1.1: Illustration on Dividend Yield

3. How is aggregate Dividend Yield for the portfolio computed?

The dividend yield acts as a potential return on investment for a portfolio. The Fund manager shall
reinvest dividends received from the underlying stock into same or other potential stock ideas. The
structure of dividend yield portfolio as per SEBI mandate restricts to maintain a minimum allocation of
65% of the net assets into dividend yielding stocks. The balance 35% will be invested into other stock
or asset class ideas based on fund manager outlook & conviction.

The aggregate dividend yield for the portfolio considers the trailing 12 months dividends which may
consist of final, interim, and any other special dividend (including buyback opportunities) reported by
each of the companies and dividend from REITs & INVITs etc. forming part of the portfolio. The gross
dividends received from each company is divided by the market value of that particular security to
arrive at the dividend yield of each security. Now, the portfolio dividend yield is computed on a
weighted average basis taking into consideration individual weights of each security in the portfolio
which is multiplied by the respective dividend yield of the securities.

Exhibit 1.2: Illustration

Portfolio % Net Assets Dividend Yield (%)
Stock A 10.0% 2.0%
Stock B 10.0% 1.0%
Stock C 8.0% 5.0%
Stock D 7.5% 4.0%
Stock E 7.0% 0.8%
Stock F 7.0% 2.0%
Stock G 6.0% 0.8%
Stock H 6.0% 1.3%
Stock I 4.0% 1.5%
Other stocks & REITS 30.0% 2.0%
Cash & Others 4.5% 0.0%
Weighted Average Dividend Yield of the
1.98%
portfolio

4. What are generally the key attributes of dividend yield companies?

Following are some of the key attributes often seen amongst high dividend yielding companies -

a. Relatively more mature businesses with an ability to generate healthy free cashflows.
b. Less prone to downside risk in falling market coupled with capital appreciation prospects in a
reviving market.
c. Relatively less volatile business with a potential to ride out uncertain macro factors.
d. Consistent dividend pay-outs & growth or a possibility of likely growth in dividend pay-outs.

5. How is rate of dividend different from dividend yield?

Companies declare dividends on the face value of each share, which is referred to as Dividend rate.

For example, if company A has a face value of Rs. 10 and a market price of Rs. 500 announces a 10%
dividend, it simply means a dividend of Re. 1 per share (10% x Rs.10) and not 10% of the share price.

However, dividend yield of company A would be 0.20% i.e. (Re. 1/ Rs. 500) assuming Re.1 is the
aggregate dividend received trailing 12 months.
 6. What do we consider as good dividend yield?

What qualifies as a good dividend yield is very subjective and depends on multiple factors such as peer
analysis, sector in which company operates in, economic cycle, price fluctuations, growth prospects,
leverage etc. Also, dividend yield as a standalone financial metric is not sufficient to determine the
financial health of a company.

However, from our portfolio construction perspective, our overall endeavour is to generate the
aggregate portfolio dividend yield that is at least 50% higher than that of the Nifty 50 Index.

7. Is a high dividend yielding company, indicative of value stock?

In general, dividend as a financial metric is one of the useful valuation measures for selecting
undervalued securities. As forward-looking dividend yield may be useful to anticipate growth trend in
earnings and therefore its relative valuation with peers, but dividend yield alone will not necessarily
indicate the stock valuation in its true sense.

Value stocks trade at prices below their intrinsic values based on company fundamentals. High dividend
yield is one of the common characteristics of value stocks, along with low P/E and low P/B ratios.
However, from a portfolio perspective, we are looking at a universe where there is attractive dividend
yield and/or dividend growth over the years. And hence, our universe will not be restricted to Value
buys but shall also have growth/quality stocks in the universe to achieve long term compounding in the
long run.

ABOUT INVESTMENT STRATEGY

1. What will be the Scheme’s broad portfolio approach to determine exposure to dividend yield
stocks?

The fund manager will strategize 2 broad approaches in sizing the portfolio basis dividend yield metric.

a) Naïve dividend yield approach: Stocks of companies with a high dividend yield are at relatively
cheaper valuations and hence are attractive. Among companies with high dividend yields, it is
better to evaluate the sustainability and potential growth of dividends to avoid potential “dividend
traps” (stocks where dividend yield is optically high but unsustainable).

b) Dividend growth approach: Stocks of companies with dividend yields and track record or potential
to grow dividends over time can be attractive both from point of view of growth in a relatively
strong underlying business and management’s focus to provide a cash return to shareholders.

Other supplemental yield measures that the fund can consider are Shareholder Yield (combined yield
of dividends and buybacks) and Free Cash Flow Yield. However, high dividend yield is not the only
parameter which we may consider over long-term compounding while curating the portfolio. Hence,
there could be certain high dividend yield companies which we may avoid or be underweight if we
foresee risks of business disruption, governance, etc.

The overall endeavour is to construct a portfolio with aggregate dividend yield that is at least 50%
higher than that of the Nifty 50 Index.

The Scheme will consider dividend yielding stocks which have paid dividend/buyback in at least 1 of the
3 preceding financial years.
 2. What will be the broad construct of the scheme’s portfolio?

From the fund category requirement as mandated by SEBI, there will be minimum allocation of 65% to
dividend yielding stocks and the balance 35% into a diversified mix of stocks or other equity/debt
oriented securities including REITs/InVTs (up to 10%) that could potentially increase dividend yield on
aggregate basis coupled with long term capital appreciation.

Exhibit 1.3: Portfolio construct

The above image is for representation purpose only. Portfolio will be managed as per the stated Investment Objective, asset
allocation & Strategy as detailed in SID. For details, please refer Scheme Information Document.

3. How will the fund manager curate scheme’s portfolio?

The portfolio is the outcome of the fund manager’s individual conviction & his/her style of managing a
portfolio basis market cycles & various other fundamental factors influencing stock selection.

Broadly, some the key factors that shall influence portfolio strategy are -

a) Bottom-up stock selection, well diversified across market capitalisation.

b) The portfolio may not intentionally target a particular style, it may be the outcome of stock
selection and hence the portfolio will be style agnostic.
c) The portfolio will be constructed on a sector and benchmark agnostic basis, focusing on absolute
returns rather than relative benchmark performance.
d) The fund manager will aim to achieve aggregate dividend yield that is at least 50% higher than that
of the Nifty 50 Index.
e) The fund manager will exploit tactical opportunities in domestic/overseas securities in the part of
the portfolio.
f) The fund manager will broadly look at businesses with attractive dividend yields & companies with
potential growth in dividends.

SCHEME FEATURES

8. What will the Scheme’s performance be benchmarked to?

The Tier I benchmark of the scheme is NIFTY 500 TRI.

9. What is the minimum initial investment that I can make in the Scheme?

The minimum investment amount for the initial investment is INR 5000 and in multiples of INR 1
thereafter. Additional purchases can be made in INR 1000 and in multiples of INR 1.
10. What is the minimum redemption that I can do from the Scheme?

The minimum redemption that can be done is INR 500 or 1 Unit or account balance whichever is lower.

11. What is the minimum SIP amount, and can I start an SIP during the NFO period?

Yes, you can start an SIP during the NFO period. The minimum SIP amount and number of instalments
are as given below –

Frequency Minimum Amounts & Installments

Daily INR 500 & in multiples of INR 1 thereafter for minimum 12 installments

Minimum INR 1000 & in multiples of INR 1 thereafter for minimum of six
Weekly installments (or) minimum INR 500 & in multiples of INR 1 thereafter for
minimum 12 installments
Minimum INR 1000 & in multiples of INR 1 thereafter for minimum 6 months
Monthly (or) minimum INR 500 & in multiples of INR 1 thereafter for minimum 12
months

Quarterly Minimum INR 1500 & in multiples of INR 1 thereafter for minimum one year

Minimum INR 3000 & in multiples of INR 1 thereafter for minimum of 4

Semi-Annually
installments

Minimum INR 5000 & in multiples of INR 1 thereafter for minimum of 4

Annual
installments

12. What are the different plans and options available for investment?

SBI Dividend Yield Fund offers two plans viz. Direct and Regular. Direct plan is for investors who will
invest directly with the Fund House or through a Registered Investment Advisor. Regular plan is for
investors who invest through any Mutual Fund distributors. Both the plans offer Growth and Income
Distribution cum Capital Withdrawal (IDCW) Option.

13. Will an exit load be applicable in the Scheme? If yes, then what is the exit load structure?

No exit load will be charged if units acquired are redeemed or switched out up to 10% of the units (the
limit) on or before 1 year from the date of allotment. An exit load of 1% is applicable if units are
redeemed or switched-out in excess of the limit on or before 1 year from the date of allotment. No exit
load is applicable for units redeemed or switched-out after 1 year from the date of allotment.

14. Who are the Fund Managers of the Scheme?

Mr. Rohit Shimpi will be a managing the scheme and Mr. Mohit Jain is the dedicated fund manager for
managing overseas investments in the scheme.

15. Can the Scheme invest in foreign securities?

The Scheme can invest in foreign securities including ADR/GDR/Foreign equity and overseas ETFs and
debt securities up to a limit of 20% of the net assets of the Scheme.
 16. Are all the stocks in the SBI Dividend Yield Fund portfolio ESG compliant?

ESG is one of the parameters of our Investment Ethos that forms part of our core multi step investment
process. We evaluate each stock in our investible universe on ESG factors based on our own framework
+ Rating agencies scores & thresholds. We engage proactively with the companies on disclosures,
ratings & controversies. We endeavour to integrate ESG philosophy into entire investment decision
making process & continuously monitor each stock on ongoing basis.

ABOUT SWP(A)
1. How can my investments in the Fund help me meet my regular cash flow requirements?

Systematic Withdrawal Plan (SWP) is a ready-made tool to get regular cash flows in a very simple and
tax-efficient manner. The Scheme also offers SWP (A) facility that you can opt for to meet your regular
cash flow requirements.

2. What is SWP(A) facility?

Under this facility, the investor can redeem a fixed amount or a fixed percentage of the cost of
investment as on date of registration of SWP (A).

3. What is the minimum amount allowed as withdrawal under the SWP (A) facility?

The minimum withdrawal amount should be INR 500 to avail the SWP (A) facility.

4. What are the permitted frequencies for withdrawal under the SWP (A) facility?

The withdrawal frequency under SWP (A) would be monthly, quarterly, half-yearly or yearly. The
limits placed on the withdrawals from the Scheme through SWP(A) are explained in the table below:

Exhibit 1.4: SWP(A) Frequency & withdrawals

Frequency Fixed % of the cost of investment Applicable months for withdrawal
or a specified amount (in INR)* in a specified frequency
Monthly 0.5% All months
Quarterly 1.5% December, march, June, September
Half – Yearly 3% March & September
Yearly 6% March
Monthly / Quarterly / Applicable months as per chosen
Any amount
Half-Yearly / Yearly frequency
*As on date of registration of SWP (A). Subject to minimum of INR 500.

5. How beneficial it is to invest in SBI Dividend Yield Fund over Dividend stocks directly for meeting
regular cashflows?

Direct investing into Dividend yield stocks may be prone to several individual biases and sentiments
and thus may generate suboptimal returns in the investor portfolio. Whereas, through professional
expertise & processes in place, well diversified dividend yield fund can prove to be a shield against
uncertainties & major downsides.

Additionally, with the use of SWP(A) feature in the Dividend Yield Fund, an investor can have tax
efficient higher cashflows relative to dividends from direct stocks. Thus, from a tax efficiency
perspective, Dividend Yield Fund scores over dividends from direct stocks as a vehicle to meet regular
cashflows.
 The illustration presented in the document is based on past performance & not indicative of any future returns. The illustrat ion is for information
purpose only. Minimum Investment amount cannot be less than INR 1 lakh in above calculation. Stamp duty, Exit Load and other deductibles, as
applicable on redemption have not been considered in the above computation. SWP(A) withdrawals have been made / effected on the 25th of the
last month of the particular month/quarter/half year/year and would be treated as redemptions. In case 25th is a non-business day, withdrawals
would be effected on the next business day. As holding period is more than 1 year, Capital Gains are taxed at 10% as per sec 112A of Income Tax
Act increased by surcharge at 15% (assuming investor falls in this slab) and CESS at 4%. For illustration purpose, it is presumed that the assessee's
aggregate LTCG is above INR 1 Lakh and hence chargeable to tax. The above table shall not be construed as tax advice or investment advice in any
manner. The views expressed herein are based on the basis of internal data, publicly available information & other sources believed to be reliable.
This illustration alone are not sufficient and should not be used for arriving at investment decision. Neither SBI Funds Management Limited, SBI
Mutual Fund nor any person connected with it, accepts any liability arising from the use of this information. Please refer to the Scheme Information
Document for detailed information on the scheme.

6. What if I mention both fixed % and amount in the withdrawal form?

In case, you mention both fixed % and amount as withdrawal amount under the facility, then fixed %
will be considered under SWP (A) by default, subject to the maximum permissible percentage, and
minimum withdrawal amount is INR 500.

7. What if I mention the amount and forget to mention the frequency?

In case, you specify the amount but miss mentioning the frequency for SWP (A), then the default
frequency shall be considered as quarterly. In case you fail to tick any of the two options viz., amount
and frequency or fixed %, then default shall be considered as quarterly frequency with 1.5% fixed
withdrawal on cost of investment as on date of registration subject to minimum of INR 500.

8. Do I have to subscribe to this facility separately?

Yes, you can opt for this facility at folio / Scheme / plan level by specifying the period and will be subject
to exit load if any as applicable. You will be required to submit SWP (A) request at least 10 days prior to
the first trigger date.

9. What happens if the account balance falls below the minimum balance requirement or if it becomes
zero?

The withdrawal under this facility will terminate automatically if no unit balance is available in the folio
/ Scheme / plan on the date of trigger or if the enrolment period expires; whichever is earlier. In case
the unit balance in the folio / Scheme / plan falls below the specified amount or % for SWP (A), the
entire remaining amount in the folio will be processed and SWP (A) will be terminated.

10. What if I already have another SWP facility on-going with the Scheme?

In case there is already an existing SWP, and the investor opts for the SWP (A) facility, then both the
SWP and SWP (A) facilities will be operational in the Scheme.
Disclaimer: This FAQ is only for the purpose of providing general information. Please refer to Scheme information
Document for complete details. Recipients are advised to seek independent professional advice before making any
investments. The views / content expressed herein do not constitute the opinions of SBI Mutual Fund or SBI Funds
Management Limited recommendation of any course of action to be followed by the recipient. SBI Mutual Fund /
SBI Funds Management Limited is not guaranteeing or promising or forecasting any returns.

Mutual Fund investments are subject to market risks, read all scheme related documents carefully.