5 Funds That Earn Medals and Deliver Ample Payouts

Since a dry spell in the go-go era of the late 1990s, it's become more common for companies to pay a dividend to holders of their equity.

Unfortunately, many actively managed funds, even those that appear to have a mandate to seek out dividends, still give shareholders only paltry payouts. For example, just 40% of the diversified equity funds with "dividend" or "income" in their names recently boasted either a one-month or 12-month trailing yield of more than 2% net of fees. For yield-seeking investors, we've tracked down several stock funds with a consistent record of paying above-average dividends that also have earned Morningstar Analyst Ratings of Gold, Silver, or Bronze.

AllianzGI NFJ Dividend Value NFJEX, Silver

As its name suggests, this fund focuses on cheap dividend payers. The management team here also favors financially sturdy companies, as evidenced by the portfolio's debt/capital ratio, which is typically below that of the Russell 1000 Value Index and the large-value norm. A focus on big, steady companies led to subpar relative showings in 2009 and 2013's big rallies led by cyclicals. But the fund has delivered the goods over lead skipper Ben Fischer's 15-year tenure. The high-minimum Institutional share class' modest fees have boosted its yield (3.2% in January), but the

boast a substantial yield.

American Century Equity Income TWEIX, Silver

This large-value fund focuses on dividend-paying stocks, but also receives a modest yield boost from a double-digit stake in convertible bonds and preferred stocks. The fund's yield in January was 2.2%. Lead manager Philip Davidson, at the helm since the fund's 1994 inception, and his team are a cautious bunch and aim to provide downside protection. (That also means that they won't overpay for yield--the fund's convertibles stake has lately shrunk due to elevated valuations.) The fund held up better than virtually all of its large-value Morningstar Category peers in the October 2007-March 2009 financial crisis and substantially outperformed rivals in 2011's bumpy market. Although the fund ate most of its competitors' dust in the rallies of 2009 and 2013, its risk-adjusted returns are quite strong.

American Funds International Growth & Income IGAAX, Gold

This is still a somewhat young fund--it launched in October 2008--but it boasts a fine pedigree. Its three managers have each been with the firm for more than 20 years and comanage other medalists such as Gold-rated

ASTON/River Road Dividend All Cap Value ARDEX, Bronze

This fund aims to deliver a pre-expense yield that is 150 basis points higher than that of its Russell 3000 Value Index benchmark. The fund doesn't always reach that goal--its yield was recently about 120 basis points above the index's--but after fees it generated a 3.0% yield over the past 12 months. And because the team doesn't lock itself into that goal, it's been able to maintain a well-diversified portfolio that isn't heavily weighted in the usual dividend-paying sectors. Impressively, the fund's returns have been less volatile than most of its large-value peers' despite a well-above-average stake in mid- and small-cap stocks. Its risk-adjusted returns since lead skipper Henry Sanders took the helm in 2005 are strong.

Vanguard Equity-Income VEIPX, Silver

This large-value fund recently had a healthy 12-month payout of 2.7% and doesn't attempt to boost its yield by holding distressed companies. Indeed, Michael Renckmeyer of Wellington Management (who runs roughly 60% of the fund) and Vanguard's quantitative investing group (which manages the rest) typically stick with companies that have solid balance sheets and generate plenty of cash. The fund's been a winner over the short and long haul, and its low 0.29% expense ratio lets more of its holdings' dividends flow through to shareholders.

For a list of the open-end funds we cover, click here. For a list of the closed-end funds we cover, click here. For a list of the exchange-traded funds we cover, click here. For information on the Morningstar Analyst Ratings, click here.