A dividend fund is a type of mutual fund which invests exclusively in equity, it also seeks to provide investors with income from common and preferred shares of stock which yield dividends in cash and/or stock on a regular basis.
Given that investors want a well-run strategy that has both minimal expenses and the potential for high returns, Finbold has examined three under-the-radar dividend stock funds with a decent yield outside of the large value category highlighted by Morningstar.
Vanguard Small-Cap Value Index Fund Admiral (MUTF: VSIAX)
The low-cost index fund offers exposure to small-capitalization U.S. value stocks, which seeks to track a value-style index of small-sized companies. Market-cap weighting, comprehensive turnover buffers, and a low fee should be a viable long-term option for investors.
According to Russ Kinnel, editor of Morningstar FundInvestor:
“Consider gold rated Vanguard Small Cap Value Index; it charges only 7 basis points leaving a yield of ⅓ quarters for you.”
Lazard Global Listed Infrastructure Open (MUTF: GLFOX)
The Lazard Global Listed Infrastructure Open funds under management totaled $14.8 billion in March 2022, significantly higher than several key competitors.
Moreover, the fund focuses on companies with monopoly characteristics, long-life assets, and regulated returns, which results in high revenue certainty and strong profitability.
The fund`s performance over the long term has been excellent in both absolute and risk-adjusted terms.
Matthews Asia Dividend Fund Investor (MUTF: MAPIX)
The geographic emphasis of this fund is on the region of Asia, which includes all of the nations and markets in the continent, including those that are established, developing, and frontier. Furthermore, the funds under management totaled as of July 2022 $2.93 billion with a portfolio turnover of 47.4%.
Matthews Asia Dividend Fund’s investment objective is to invest at least 80% of its net assets, which include borrowings for investment purposes, in dividend-paying equity securities of companies located in Asia.
With a modest yield of 1%, the fund looks to moderate its risk exposure since results can get extreme.
Rounding it all up
Investors looking for a steady stream of income tend at times to “bite the bullet” with individual stocks that can suspend dividends and hurt the income. Therefore, dividend-paying mutual funds could be a better option as they collect dividends from multiple stocks.
The above three represent solid options that investors can keep on their watchlists and potentially look to invest in for the long run.
Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.