The U.S. economic data indicates a mixed but resilient picture. Manufacturing remained firmly in expansion, with the ISM manufacturing PMI rising to 55.6 in July, its best reading since May 2022. According to the University of Michigan’s Consumer Sentiment Index, consumer sentiment improved to 55.2 in July, up from 49.5 in June. Consumer Price Index forecast increased 0.1% in July, which further reduced market expectations of the Federal Reserve raising interest rates this year.

For investors, the story gets more complicated. The labor market flashed warning signs as nonfarm payrolls fell 23,000 in July, sharply missing expectations for an 82,000 increase. Job openings declined to 7.359 million in June, while services PMI slipped to 54.1 from 54.0, although it remained in expansion territory for the 25th straight month. Meanwhile, rising oil prices due to the Middle East conflict are adding another layer of uncertainty. WTI crude climbed to $82.32 per barrel and Brent to $87.86 as tensions with Iran raised supply concerns. Higher energy costs could reignite inflation and limit the Fed’s room to cut interest rates.

Wall Street faces a classic balancing act as investors weigh economic resilience against growing risks. Strong manufacturing activity and solid corporate earnings are encouraging, but weakening employment and elevated oil prices could challenge economic growth and valuations. Investors should therefore expect continued volatility going forward. The recent market rally shows that optimism remains strong, but the combination of sticky inflation, geopolitical risks and softer jobs data means investors may need to stay selective.

In such a critical time, investors looking for higher current income, potentially attractive total returns and portfolio diversification can invest in dividend-paying mutual funds like Franklin Gold And Precious Metals Fund (FGADX Quick QuoteFGADX - Free Report) , F/m Investments Large Cap Focused Fund (IAFMX Quick QuoteIAFMX - Free Report) and Amg Yacktman Global Fund (YFSNX Quick QuoteYFSNX - Free Report)  as they provide regular incomethat can help investors meet their goals.

These funds have wide exposure in sectors such as industrial cyclical, technology, finance, retail trade and energy since they have given positive returns and are expected to perform well in the near future.

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 three Zacks Mutual Fund Rank #1 (Strong Buy) mutual funds that have a promising dividend yield, have positive three-year and five-year annualized returns, minimum initial investments within $5000, and carry a low expense ratio.

Franklin Gold And Precious Metals Fund invests most of its net assets in securities of gold and precious metals operation companies located anywhere in the world, irrespective of their market capitalization. FGADX advisors prefer to invest heavily in non-U.S., small- and mid-capitalization companies.

Steve M. Land has been the lead manager of FGADX since April 1, 1999. Most of the fund’s holdings were in companies like Newmont (5.1%), Barrick Mining (5%) and G Mining Ventures (4.6%) as of Jan. 31, 2026.

FGADX’s dividend yield is 10.9%. The fund’s three-year and five-year annualized returns are 47.5% and 20.3%, respectively. FGADX has an annual expense ratio of 0.58%.

To see how this fund performed compared to its category and other 1 and 2 (Buy) Ranked Mutual Funds, please click here.

F/m Investments Large Cap Focused Fund invests most of its net assets in equity securities of domestic large-cap companies that, according to its advisors, are likely to appreciate. IAFMX advisors may also purchase American Depository Receipts of international companies trading on U.S. exchanges.

Francisco Bido has been the lead manager of IAFMX since Oct. 3, 2016. Most of the fund’s holdings were in companies like Apple (15.5%), NVIDIA (11.9%) and Microsoft (6.9%) as of Feb. 28, 2026.

IAFMX’s dividend yield is 8.2%. The fund’s three-year and five-year annualized returns are 30% and 17.4%, respectively. IAFMX has an annual expense ratio of 1.07%. 

Amg Yacktman Global Fund invests most of its net assets in domestic and foreign (including emerging markets) equity securities. YFSNX advisors also invest in debt securities like U.S. Treasury notes and bonds, investment-grade corporate debt securities, convertible debt securities and high-yield below-investment-grade debt securities (or junk bonds).

Stephen Yacktman has been the lead manager of YFSNX since Jan. 30, 2017. Most of the fund’s holdings were in companies like Bolloré (9.9%), Canadian Natural Resources (6.2%) and Nihon Parkerizing (4.6%) as of March 31, 2026.

YFSNX’s dividend yield is 10.2%. The fund’s three-year and five-year annualized returns are 19.5% and 10.4%, respectively. YFSNX has an annual expense ratio of 1.13%. 

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