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4 Best Dividend-Paying Mutual Funds to Buy in February 2023
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Domestic inflation remains elevated from October 2021, and poses a serious threat to the economy. As investors are waiting for the January 2023 Consumer Price Index data, logistics managers are warning of persistent impact of inflation on the supply-chain system.
Excessive inventories due to a lack of consumer demand are pushing warehouse rates upward. The Dow, the S&P 500, and the Nasdaq have already posted a negative return of 0.93%, 6.10%, and 13.77%, over the past year.
The Federal Reserve’s pledge to fight inflation by hiking interest rates showed good results in the month of December, when the consumer price index dropped to 6.5% after record highs in June 2022. The Fed expects inflation to remain on a downward trend and the period of disinflation to have begun. But national storage pricing was up 1.4% month over month and 10.6% year over year, according to WarehouseQuote, citing a CNBC article. High warehousing and supply-chain charges will definitely be passed on to the end consumers, pushing up inflation again.
Since getting control over inflation is more complex than what markets anticipate, it is not likely to be resolved soon. Investors looking to diversify their portfolios and earn a regular income can choose dividend-paying mutual funds.
We have, thus, selected four mutual funds that have a promising dividend yield, have given impressive 3-year and 5-year annualized returns, boast a Zacks Mutual Fund Rank #1 (Strong Buy) or 2 (Buy), offer a minimum initial investment within $5,000 and carry a low expense ratio as compared to its category average.
Shelton Equity Income Fund (EQTKX - Free Report) seeks high current income along with capital appreciation by investing most of its assets, along with borrowings, if any, in common stocks of domestic companies which pay a relatively high level of dividend income and also have a potential for capital appreciation. EQTKX advisors choose to invest in stocks of medium and large U.S. corporations.
Stephen C. Rogers has been the lead manager of EQTKX since Dec 31, 2003, and most of the fund’s holdings were in technology (26.33%), finance (14.73%) and retail trade (10.91%) as of Dec 31, 2022.
EQTKX’s dividend yield is 8.6%. The fund’s 3-year and 5-year annualized returns are 5.5% and 5.0%, respectively. The annual expense ratio of 0.74% is lower than the category average of 1.11%. EQTKX has a Zacks Mutual Fund Rank #1.
To see how this fund performed compared to its category, and other 1 and 2 Ranked Mutual Funds, please click here.
BNY Mellon Global Real Return Fund (DRRCX - Free Report) seeks total return by investing most of its assets in an actively managed, multi-asset strategy that can produce real returns, which are less volatile than major equity markets over a complete market cycle, typically for a period of five years. DRRCX advisors choose to invest in global equities, bonds, cash, real estate, commodities, currencies and alternative or non-traditional asset classes and strategies, primarily those accessed through derivative instruments in various proportions.
Suzanne Hutchins has been the lead manager of DRRCX since Dec 31, 2010, and most of the fund’s holdings are in others (60.77%), industry cyclical (9.03%) and finance (7.68%) as of Dec 31, 2022.
DRRCX’s dividend yield is 8.2%. The fund’s 3-year and 5-year annualized returns are 1.4% and 2.9%, respectively. The annual expense ratio of 0.95% is lower than the category average of 1.29%. DRRCX has a Zacks Mutual Fund Rank #1.
Cullen Enhanced Equity Income Fund Retail (ENHRX - Free Report) seeks long-term capital appreciation along with current income by investing most of its assets along with borrowings if any, in dividend-paying common stocks domestic and foreign companies with large and medium market capitalization. ENHRX advisors consider medium-cap companies as those with a market capitalization ranging between $5 billion and $12 billion and large-cap as those with above $12 billion at the time of investment.
Jennifer Chang has been the lead manager of ENHRX since Dec 15, 2015, and most of the fund’s holdings are in finance (19.45%), health (17.10%) and technology (14.76%) as of Dec 31, 2022.
ENHRX’s dividend yield is 5.9%. The fund’s 3-year and 5-year annualized returns are 7.3% and 6.6%, respectively. The annual expense ratio of 0.75% is almost in line with the category average of 1.11%. ENHRX has a Zacks Mutual Fund Rank #1.
BlackRock High Equity Income Fund (BMECX - Free Report) invests most of its assets, along with borrowings, if any, in equity securities and equity-related instruments, including equity-linked notes preferably in with large market capitalization. BMECX advisors may also invest a small portion of their assets in equity-linked notes that provide exposure to equity securities and covered call options or other types of financial instruments.
Tony DeSpirito has been the lead manager of BMECX since Jun 12, 2017, and most of the fund’s holdings are in other (34.42%), finance (15.46%) and technology (12.90%) as of Dec 31, 2022.
BMECX’s dividend yield is 5.6%. The fund’s 3-year and 5-year annualized returns are 5.4% and 5.6%, respectively. The annual expense ratio of 0.80% is almost in line with the category average of 1.11%. BMECX has a Zacks Mutual Fund Rank #2.
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4 Best Dividend-Paying Mutual Funds to Buy in February 2023
Domestic inflation remains elevated from October 2021, and poses a serious threat to the economy. As investors are waiting for the January 2023 Consumer Price Index data, logistics managers are warning of persistent impact of inflation on the supply-chain system.
Excessive inventories due to a lack of consumer demand are pushing warehouse rates upward. The Dow, the S&P 500, and the Nasdaq have already posted a negative return of 0.93%, 6.10%, and 13.77%, over the past year.
The Federal Reserve’s pledge to fight inflation by hiking interest rates showed good results in the month of December, when the consumer price index dropped to 6.5% after record highs in June 2022. The Fed expects inflation to remain on a downward trend and the period of disinflation to have begun. But national storage pricing was up 1.4% month over month and 10.6% year over year, according to WarehouseQuote, citing a CNBC article. High warehousing and supply-chain charges will definitely be passed on to the end consumers, pushing up inflation again.
Since getting control over inflation is more complex than what markets anticipate, it is not likely to be resolved soon. Investors looking to diversify their portfolios and earn a regular income can choose dividend-paying mutual funds.
Mutual funds, in general, reduce transaction costs and diversify portfolios without an array of commission charges that are mostly associated with stock purchases (read more: Mutual Funds: Advantages, Disadvantages, and How They Make Investors Money).
We have, thus, selected four mutual funds that have a promising dividend yield, have given impressive 3-year and 5-year annualized returns, boast a Zacks Mutual Fund Rank #1 (Strong Buy) or 2 (Buy), offer a minimum initial investment within $5,000 and carry a low expense ratio as compared to its category average.
Shelton Equity Income Fund (EQTKX - Free Report) seeks high current income along with capital appreciation by investing most of its assets, along with borrowings, if any, in common stocks of domestic companies which pay a relatively high level of dividend income and also have a potential for capital appreciation. EQTKX advisors choose to invest in stocks of medium and large U.S. corporations.
Stephen C. Rogers has been the lead manager of EQTKX since Dec 31, 2003, and most of the fund’s holdings were in technology (26.33%), finance (14.73%) and retail trade (10.91%) as of Dec 31, 2022.
EQTKX’s dividend yield is 8.6%. The fund’s 3-year and 5-year annualized returns are 5.5% and 5.0%, respectively. The annual expense ratio of 0.74% is lower than the category average of 1.11%. EQTKX has a Zacks Mutual Fund Rank #1.
To see how this fund performed compared to its category, and other 1 and 2 Ranked Mutual Funds, please click here.
BNY Mellon Global Real Return Fund (DRRCX - Free Report) seeks total return by investing most of its assets in an actively managed, multi-asset strategy that can produce real returns, which are less volatile than major equity markets over a complete market cycle, typically for a period of five years. DRRCX advisors choose to invest in global equities, bonds, cash, real estate, commodities, currencies and alternative or non-traditional asset classes and strategies, primarily those accessed through derivative instruments in various proportions.
Suzanne Hutchins has been the lead manager of DRRCX since Dec 31, 2010, and most of the fund’s holdings are in others (60.77%), industry cyclical (9.03%) and finance (7.68%) as of Dec 31, 2022.
DRRCX’s dividend yield is 8.2%. The fund’s 3-year and 5-year annualized returns are 1.4% and 2.9%, respectively. The annual expense ratio of 0.95% is lower than the category average of 1.29%. DRRCX has a Zacks Mutual Fund Rank #1.
Cullen Enhanced Equity Income Fund Retail (ENHRX - Free Report) seeks long-term capital appreciation along with current income by investing most of its assets along with borrowings if any, in dividend-paying common stocks domestic and foreign companies with large and medium market capitalization. ENHRX advisors consider medium-cap companies as those with a market capitalization ranging between $5 billion and $12 billion and large-cap as those with above $12 billion at the time of investment.
Jennifer Chang has been the lead manager of ENHRX since Dec 15, 2015, and most of the fund’s holdings are in finance (19.45%), health (17.10%) and technology (14.76%) as of Dec 31, 2022.
ENHRX’s dividend yield is 5.9%. The fund’s 3-year and 5-year annualized returns are 7.3% and 6.6%, respectively. The annual expense ratio of 0.75% is almost in line with the category average of 1.11%. ENHRX has a Zacks Mutual Fund Rank #1.
BlackRock High Equity Income Fund (BMECX - Free Report) invests most of its assets, along with borrowings, if any, in equity securities and equity-related instruments, including equity-linked notes preferably in with large market capitalization. BMECX advisors may also invest a small portion of their assets in equity-linked notes that provide exposure to equity securities and covered call options or other types of financial instruments.
Tony DeSpirito has been the lead manager of BMECX since Jun 12, 2017, and most of the fund’s holdings are in other (34.42%), finance (15.46%) and technology (12.90%) as of Dec 31, 2022.
BMECX’s dividend yield is 5.6%. The fund’s 3-year and 5-year annualized returns are 5.4% and 5.6%, respectively. The annual expense ratio of 0.80% is almost in line with the category average of 1.11%. BMECX has a Zacks Mutual Fund Rank #2.
Want key mutual fund info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing mutual funds, each week. Get it free >>