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Discovering The Best Dividend Paying Mutual Funds

February 26, 2012 | Comments: 0 | Views: 145

The Best Dividend Paying Mutual Funds

Investors will want to be on the lookout for the best dividend paying mutual funds, as dividends have a very important part to play in any investment portfolio. They give investors an instant source of revenue, and during bear markets such as this one, protect against the downward movement of share prices. In the past ten years, the United States citizens have watched our stock markets lose 2%.. But if you had been invested in the best dividend paying mutual funds during this time, a total of 5% compounded annual gains would have come back to you. The following contains information about the top three dividend mutual funds that you should have on your list.

T. Rowe Price Equity Income

When it comes to no-load mutual funds, the T. Rowe Price Equity Income (PRFDX) mutual fund is one that you should have your eyes on. It invests in American companies that are large cap, as well as dividend-paying. These companies include JP Morgan Chase, Chevron Corp, General Electric, Bank of American, ExxonMobil Oil, American Express, and more. In spite of many mutual funds losing steam in the past ten years, Morningstar has reported this fund to have a return of 5.26%. Much of the fund's positive performance is due to the stocks it contains in its portfolio that pay dividends. At present, the T. Rowe Price Equity Income yields 1.72% and has assets amounting to $23.3 billion. The fund's current manager is Brian C. Rogers, who has worked with the fund since October of 1985.

Vanguard Dividend Growth Inv

Up next on the list of best dividend paying mutual funds is the Vanguard Dividend Growth Inv (VDIGX). This mutual fund is a large cap "blend" fund, or one that invests in several different kinds of industries, such as health care, energy, data processing, gas, etc. This is yet another kind of no-load fund, and has a 1.75% dividend yield, as well as assets amounting to $5.7 billion. Its annual gain since 2001 has been 3.3%, and its manager is Donald J. Kilbride, aboard the team since 2006. Under Kilbride's direction, the fund has had an expense ratio of 0.34%, which is extremely low. VDIGX's top five holding companies are Automatic Data Processing Inc, Exxon Mobil Corp, Pfizer Inc, BG Group PLC, and PepsiCo Inc/NC.

The Franklin Utilities Fund

Last but not least of the best dividend paying mutual funds is Franklin Utilities (FRUAX). Its yield is 3.44%, and it currently has $3 billion in assets being managed. Franklin Utilities was started in 1998 by John Kohli, who still leads it today. The fund's investments of choice include high-caliber utility companies, all of which pay dividends. Some examples of these companies are Sempra Energy, PG&E Corp, Southern Company, NextEra Energy, Entergy Corp, and more. The reason for the fund's focus on utility companies is due to their reliable cash flow. The past ten years have seen this fund outperform Standard & Poor's 500 with a yearly return of a highly impressive 6.87%. While the fund performs well, the main drawback of it has been said to be its 4.25% initial sales charge. However, talking to your 401k plan administrator could lead to you having the fee waived entirely.

Connor Swinney is the owner of the What Are Mutual Funds website. He created the website to be used as a resource for people who are looking for more information on The Advantage Of Precious Metals or that would like to know how they can create a successful investment strategy.

Source: EzineArticles
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