Need Yield? These Stock Funds Have Income
Try this screen for dividend-seeking funds with winning long-term records.
For those with long-term investment horizons, dividend-focused funds offer a great way to reap the rewards of income-generating stocks while minimizing the risk that firm-specific problems at a few companies will affect your entire portfolio.
A mutual fund's yield is an annual percentage measure of income (dividends and interest) earned by the portfolio's holdings, net of the fund's expenses. Morningstar's Premium Fund Screener allows you to search for trailing 12-month yield, which is calculated by taking the weighted average of the yields of the stocks or the funds (if it's a fund of funds) in the portfolio for that time frame. In this case, the screen narrows the field to funds with trailing 12-month yields greater than that of Vanguard 500 Index Investor (VFINX). While this won't lead exclusively to dividend-focused strategies, it turns up additional funds that can appeal to yield-hungry types.
Other basic criteria for this screen include focusing on domestic stock funds with below-average expense ratios that are open to new investments of $25,000 or less. Lastly, fund manager tenure is set to greater than the category average, and each fund's 10-year category ranking is above average.
Karin Anderson does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.