The average dividend mutual fund has outperformed the S&P 500 in the past 15 years. Their holdings pay out significant portions of earnings, which can help limit their stocks' decline during bear markets. Thus the average dividend mutual fund would have turned an investment of $10,000 on March 31, 2000, into $25,515 by May 19 this year, according to Morningstar Inc. data. The S&P 500 would have turned the same investment into $18,989. But dividend funds can lag during bull phases of the stock market, when growth companies that pay little or no dividends get rewarded for plowing earnings back into productive businesses.
Mutual funds pay out to their shareholders virtually all of the dividends collected from fund holdings. So that makes many dividend funds a possible source of income for investors, particularly those in retirement plans. So in addition to providing diversification for a portfolio and minimizing volatility, dividends can be a source of income. In fact, investors disappointed with low bond yields in recent years, can find better opportunities in dividend funds. Investors can choose to have funds' dividend distributions sent to them or their cash accounts, or they can choose to reinvest the payouts back into their funds.
Source: Investors.com
Related Articles:
- Why Dividends Matter
- 6 Stocks Currently Trading Below their Fair Value
- The Perfect Dividend Stock
- Bonds Look Morbid When Compared To These Dividend Stocks
- My 5 Largest Dividend Stock Positions Have Double-Digit Lifetime Returns
Dividend Stocks Or Mutual Funds: Which Should You Own
Posted by D4L | Wednesday, June 17, 2015 | ArticleLinks | 0 comments »________________________________________________________________
Subscribe to:
Post Comments (Atom)
~
Popular Posts Last 30 Days
-
As a relatively new blogger, the one thing that has stood out in my mind is the number of Canadian bloggers in the areas that I am most inte...
-
GameStop (NYSE:GME) lost about 40% of its market value over the past three years, as rising digital downloads and declining mall traffic thr...
-
In a capitalistic society, opportunities to generate (mostly) passive income are all around us. Dividend growth investing is one of the most...
-
These elite income producers have rallied this year. Their brilliance at producing passive income seems to have caught the market's eye ...
-
Since the market highs in July, stocks have been under considerable pressure. Indeed, 10-year Treasury yields are at the highest level since...
-
Buying dividend stocks can be tricky. Oftentimes, stocks that pay exorbitantly high dividends have underlying financial problems, and their ...
-
While optimism in the broader market remains robust – particularly for hyped-up sectors like technology – investors may still want to consid...
-
If you are looking for reliable dividends, these three Dividend Kings should be right up your alley. Dividends are paid at the discretion of...
-
A strong dividend investing strategy may be to focus on high-quality names that score well on several dividend-related metrics. In other wor...
-
Despite all that work, its valuation remains dirt cheap. That's a big reason why its distribution currently yields more than 9% despite ...
0 comments
Post a Comment
Post a Comment
Note: Only a member of this blog may post a comment.