Dividend Mutual Funds Analysis

5 Best Dividend Paying Mutual Funds with High Income

Dividends make a very important part of any investor's portfolio. Dividends provide an instant cash flow return on your investment and also act as a downside protector in bear markets. Also, the US stock markets have lost 2% annualized over the last 10 years. If you were invested in dividend paying mutual funds during this time, you would probably have made 5% compounded annual gains. In this article, we will go over 10 best mutual funds that pay dividends. You should also make sure your mutual fund investments are well diversified ranging from high income bond funds, utilities, telecommunications & real estate dividend paying funds, exposure to high quality emerging markets companies, Large Cap dividend paying companies & some exposure to Small caps...(Read Full)

Best Dividend Paying Mutual Funds in Health Care

When markets go in correction mode like the one we are seeing in gold, silver & oil prices, other investments such as healthcare go north because consumers need healthcare & pharmaceutical products no matter what. The demand for healthcare products & services remains unaffected from the state of the economy. On top of that, healthcare companies are some of the highest dividend paying companies with a cooling effect on dropping share prices. In this article, we will go over the best dividend paying mutual funds in the health care sector with strong management, clear objectives & a disciplined approach to investing... (Read Full)

Top Conservative Dividend Paying Mutual Funds

In the first & second quarters of 2011, the stock markets have been rallying with the Dow Jones Industrial Average (DJIA) peaking at 12,810 while the S&P 500 topped 1363 on April 29th, 2011. However most investors are still cautious as the economic recovery is still fragile & the pace of growth is slow. Also, concerns about excessive debts in European countries such as Greece, Portugal, Spain pose great risks to the markets. This could cause the Euro to weaken further causing the US dollar to rise, commodities & oil to plunge & the equity markets in general to go through a severe correction (5 to 10%). We at Best Dividend Paying Mutual Funds.com think these risks are valid & do pose a great danger to investor's portfolios. For this reason, we will outline the top 5 conservative dividend paying mutual funds that also have bond allocations to limit downside losses in case of a huge market correction. If you read our article on Why to Invest in Dividend Paying Mutual Funds, you know that dividends act as a protector against downward bear markets when stocks across the entire market tumble... (Read Full)

Best High Yielding Bond Mutual Funds

Since the entire concept of this website is about high yielding dividend mutual funds, investors might also want to be interested in bond mutual funds that pay high dividends and hold US Corporate & Government debt. Investing in a bond mutual fund means i) you will get the services of a qualified professional fund manager that understands the business and ii) your risk levels will be diversified because bonds from different sectors of the economy will be chosen. Here is how bond mutual funds are usually diversified:

• Bonds are issued by different levels of government or municipalities & corporations in different sectors of the economy.
  
• Bonds mature on different dates, some are short term bonds while others are long term bonds (5 years or more).
  
• Bonds pay different yields, Corporate bonds usually pay higher yields than Government bonds.
  
• Bonds carry different levels of risk
  

Mutual Funds Education

How to Examine a Mutual Fund's Fundamentals

Just like how analysts like to measure a company's stock via the price to earnings ratio, price to book ratio, earnings per share growth, Beta, market capitalization & volume, dividend mutual funds can also be measured in the same manner.

i) Price to Earnings Ratio (P/E)

The price to earnings ratio of a mutual fund tells us how expensive this mutual fund is relative to the earnings of its holdings. Just like a stock's P/E ratio, this metric is important in determining the valuation of a mutual fund & its net asset value. A higher P/E ratio means the fund is more expensive while a lower P/E ratio might suggest the fund is undervalued or it is having problems earning money for investors. Historically, a price to earnings ratio greater than 15 suggests a mutual fund might be expensive while lower than that suggests it is cheaper... (Read Full)

How to Understand Mutual Fund Load Charges & Operating Expenses

If you surf through my favorite Mutual funds research website MorningStar.com, you will see many mutual funds that have different fee classifications; No Load, Front End Load, Intial Sales Charge, Low Fee, etc. In this article, we will go over some common abbreviations that are used to describe how much fees a mutual fund charges. First as with any business, running a mutual fund entails expenses including fees to buy/sell stocks, investment banker fees, marketing & administrative fees, dividend distribution fees, etc. Also the mutual fund manager & his analyst team who run the mutual fund also need to get paid. Mutual funds pass along these costs to their investors by charging fees & expense ratios.

Why to Invest in Dividend Paying Mutual Funds

Investors love dividend-paying stocks because of the reliability of their cash flows & stable businesses that will exist well in to the future. Utility companies, industrial conglomerates & oil & gas companies fall in to this category. However the run up in technology stocks in the late 1990s brought negative effects on dividend paying stocks because investors turned away from them in search of higher growth technology companies. In fact during the market top in March 2000, the average dividend yield of all companies in the S&P 500 Index fell to just 1.1%. This was versus a historic average dividend yield of 3%. Since then, tech stocks have tumbled & dividend paying stocks have become favorable again. In this article, we will go over why now is a good time to invest in dividend paying mutual funds... (Read More)