Best of the Week
Most Popular
1. Gold Final Warning: Here Are the Stunning Implications of Plunging Gold Price - P_Radomski_CFA
2.Fed Balance Sheet QE4EVER - Stock Market Trend Forecast Analysis - Nadeem_Walayat
3.UK House Prices, Immigration, and Population Growth Mega Trend Forecast - Part1 - Nadeem_Walayat
4.Gold and Silver Precious Metals Pot Pourri - Rambus_Chartology
5.The Exponential Stocks Bull Market - Nadeem_Walayat
6.Yield Curve Inversion and the Stock Market 2019 - Nadeem_Walayat
7.America's 30 Blocks of Holes - James_Quinn
8.US Presidential Cycle and Stock Market Trend 2019 - Nadeem_Walayat
9.Dear Stocks Bull Market: Happy 10 Year Anniversary! - Troy_Bombardia
10.Britain's Demographic Time Bomb Has Gone Off! - Nadeem_Walayat
Last 7 days
S&P 500’s Downward Reversal or Just Profit-Taking Action? - 18th April 19
US Stock Markets Setting Up For Increased Volatility - 18th April 19
Intel Corporation (INTC) Bullish Structure Favors More Upside - 18th April 19
Low New Zealand Inflation Rate Increases Chance of a Rate Cut - 18th April 19
Online Grocery Shopping Will Go Mainstream as Soon as This Year - 17th April 19
America Dancing On The Crumbling Precipice - 17th April 19
Watch The Financial Sector For The Next Stock Market Topping Pattern - 17th April 19
How Central Bank Gold Buying is Undermining the US Dollar - 17th April 19
Income-Generating Business - 17th April 19
INSOMNIA 64 Birmingham NEC Car Parking Info - 17th April 19
Trump May Regret His Fed Takeover Attempt - 16th April 19
Downside Risk in Gold & Gold Stocks - 16th April 19
Stock Market Melt-Up or Roll Over?…A Look At Two Scenarios - 16th April 19
Is the Stock Market Making a Head and Shoulders Topping Pattern? - 16th April 19
Will Powell’s Dovish Turn Support Gold? - 15th April 19
If History Is Any Indication, Stocks Should Rally Until the Fall of 2020 - 15th April 19
Stocks Get Closer to Last Year’s Record High - 15th April 19
Oil Price May Be Setup For A Move Back to $50 - 15th April 19
Stock Market Ready For A Pause! - 15th April 19
Shopping for Bargain Souvenirs in Fethiye Tuesday Market - Turkey Holidays 2019 - 15th April 19
From US-Sino Talks to New Trade Wars, Weakening Global Economic Prospects - 14th April 19
Stock Market Indexes Race For The New All-Time High - 14th April 19
Why Gold Price Will “Just Explode… in the Blink of an Eye” - 14th April 19
Palladium, Darling of the PGEs, Shifting into High Gear - 13th April 19
MMT is a spectacularly Dem idea - 13th April 19
The 'Silver Lines' of Opportunity - 13th April 19
Gold Stocks Bull Market Breakout Potential - 13th April 19

Market Oracle FREE Newsletter

Top 10 AI Stocks Investing to Profit from the Machine Intelligence Mega-trend

Dividend Fund Choices for Long-Term Investors

Companies / Dividends Aug 26, 2016 - 05:55 PM GMT

By: Submissions


Market Bulls writes: With global interest rates holding at historically low levels, many long-term investors are looking for new ways of generating income returns.  One of the most attractive choices in the space is the Vanguard High Dividend Yield Index Fund (VHDYX), which is an open-end fund. The central aim of the fund is to track the share price and dividend performance seen in the FTSE High Dividend Yield Index, which is comprised of common stocks that offer higher dividends when compared to the sector averages.

The Vanguard High Dividend Yield Index Fund investa heavily in many of the blue-chip stocks that are well-know to dividend investors.  Eight of its top 10 holdings have generated strong dividend growth and double-digit growth in stock appreciation over the last year. Its top holding include: Microsoft (MSFT), Exxon Mobil (XOM), Procter & Gamble, AT&T, Wells Fargo and others.

On the back of its stake in blue-chips, Vanguard High Dividend Yield Index Fund has generated returns of 15.44% annually, compared with 15.22% for Vanguard's S&P 500 index fund. The fund has the potential to generate better returns for investors, considering its investments in quality high-dividend stocks.

Alternative Dividend Fund Choices

Alternatively, the T. Rowe Price Dividend Growth Fund (PRDGX) continues to outperform the Standard & Poor’s 500 index -- something the fund has done consistently over the last 15 years. There are numerous ways to deal with dividend investing and this is one reason why long-term investors tend to consider structured offerings like betterment or wealthfront.

Tom Huber, the manager of the $5.9 billion PRDGX fund, is working on an updated strategy for investing in high-dividend growth stocks rather than high-dividend yield stocks.  This strategy has generated stable returns investors and fund managers over the last 10 years.

According to the fund manager the aim of PRDGX is to balance a competitive current yield with high dividend growth.  Benefits can be seen when fund are successfully able to avoid building a a concentration in a small number of high-yielding sectors, but the fund does show a clear focus on telecoms and utilities.

Since the beginning of this year, the fund has returned 10.21% to investors and this can be compared to returns of 8.4% in the S&P 500. The fund’s major holdings include: Comcast (CMCSA), General Electric (GE), Pfizer (PFE), Becton Dickinson (BDX) and others.

T. Rowe Price Dividend Growth Fund also focuses on the financial sector, which accounts for 17.6% of its total holdings. The fund adds stocks from the energy, utility and materials sectors to create a diversified balance. Overall, the fund’s strategy of investing in high-dividend growth stocks seems to be working and PRDGX should continue to be considered in long-term strategies going forward.

© 2016 Copyright Market Bullls- All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

© 2005-2019 - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.

Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules