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3 Top-Ranked Dividend Funds to Buy Amid Market Volatility

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It has been a volatile year for markets so far as multiple factors have been denting investors’ confidence. Aggressive rate hikes by the Fed to fight surging inflation have escalated fears of economic slowdown. Moreover, geopolitical tension, especially the ongoing Russia-Ukraine war and a series of sanctions on Moscow as a result of the conflict, has dented investors’ confidence.

Although rising prices have lately cooled down, inflation is still at multi-year highs, making the bulls skittish and giving hopes to bears this year. Given this situation, income-seeking investors should go for funds that have more exposure to stocks providing handsome dividends. Thus, funds like AB All Market Real Return Portfolio Class C (ACMTX - Free Report) , AB Global Risk Allocation Fund Class I (CABIX - Free Report) and Catalyst Systematic Alpha Fund Class I (ATRFX - Free Report) are likely to benefit in the near term.

Rate Hike Fears Denting Investors’ Confidence

Markets haven’t been able to hold on to last year’s rally as rising costs have been making people spend cautiously. In fact, markets have been bleeding almost since the beginning of the year, with the S&P 500 and the Nasdaq entering bear territory. Although both indexes are now out of that zone, they are still in correction territory.

Inflation is at a 41-year high and the Fed has been aggressive in hiking rates to control the situation. The Fed has so far hiked interest rates by 225 basis points and has said that it would continue to aggressively hike rates so long it doesn’t get a full grip on soaring inflation.

Moreover, the bond markets have been tumultuous this year since the Fed started aggressively purchasing assets to tighten its monetary policy grip. Markets have suffered as a result of this since it has kept investors on edge. The largest loser of this situation has been growth stocks.

On the other side, markets have been suffering as a result of escalating geopolitical tensions. Multiple sanctions on Russia by the United States and several other European countries have been creating further problems, most importantly soaring energy prices. This has been further denting investors’ confidence 

Top 3 Dividend Mutual Funds to Buy Now

Rising interest rates and growing geopolitical tensions have raised fears of a global slowdown and may lead to further uncertainty in the near future. Given this scenario, income-seeking investors should go for mutual funds that invest in dividend-paying equities to get the regular cash they need.

We have selected three such mutual funds that promise good 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.

The question here is why should investors consider mutual funds? Reduced transaction costs and diversification of portfolios without the several commission charges that are associated with stock purchases are the primary reasons why one should be parking their money in mutual funds (read more: Mutual Funds: Advantages, Disadvantages, and How They Make Investors Money).

AB All Market Real Return Portfolio Class C fund seeks to invest in a balance of asset types, like stocks, bonds, and cash, and including precious metals or commodities is not unusual. ACMTX’s 3-year and 5-year annualized returns are 9.2% and 5.9%, respectively. AB All Market Real Return Portfolio Class C fund has a Zacks Mutual Fund Rank #2.

AB Global Risk Allocation Fund Class I seeks high return through a combination of current income and capital appreciation. CABIX invests principally in a diversified portfolio of equity and fixed-income securities such as common and preferred stocks, U.S. Government and agency obligations, bonds and senior debt securities. AB Global Risk Allocation Fund Class I’s 3-year and 5-year annualized returns are 7.4% and 6%, respectively. CABIX has a Zacks Mutual Fund Rank #1.

Catalyst Systematic Alpha Fund Class I seeks long-term capital appreciation. ARTFX’s aim is to outperform the BNP Paribas Catalyst Systematic Alpha Index in terms of total return. Catalyst Systematic Alpha Fund Class I has a 3-year and 5-year annualized return of 10.9% and 6.6%, respectively. ATRFX has a Zacks Mutual Fund Rank #2.

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Catalyst Systematic Alpha I (ATRFX) - free report >>

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AB Golbal Risk Allocation I (CABIX) - free report >>

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