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2 Large-Value Funds With Different Approaches to Dividends

Bronze-rated Invesco Dividend Income and Silver-rated Invesco Diversified Dividend may have different mandates but both are solid choices for investors seeking income.

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Susan Wasserman: Lead manager Meggan Walsh and her team run two large-value funds that take different approaches to dividend investing.

Bronze-rated Invesco Dividend Income has an explicit dividend focus, and stocks that make it into this fund must yield at least 2%, though most names yield much higher than that. The fund began as a utilities fund, but Invesco eliminated the utilities focus in February 2013. The fund can now invest across sectors; however the makeup of the fund is still heavily weighted toward defensive areas. About 19% of assets are in utilities and another 16% are in consumer staples. As a point of comparison, the typical large-value fund holds roughly 5% in utilities and 8% in consumer staples. The fund is much lighter in financials and energy than the typical peer.

Susan Wasserman does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.