5 Funds That Earn Medals and Deliver Ample Payouts
These funds offer more than simply yield.
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. Microsoft (MSFT) helped kick off a trend, particularly for tech firms, when it started issuing dividends several years ago, and other cash-rich firms have followed suit. True, at about 2%, the yield of the S&P 500 still isn't exactly lofty, thanks in part to equities' big run since early 2009, but that's still double the benchmark's yield at the end of the 1990s and comparable to the yield offered by a 10-year Treasury bond.
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.
Greg Carlson does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.