Susan Dziubinski: Hi, I'm Susan Dziubinski for Morningstar.com. Dividend growth funds focus on companies that have a history of increasing their dividends. Companies that regularly boost their dividends often have sustainable competitive advantages. A collection of such high-quality companies can make an excellent core holding. As such, even investors who aren't yield seekers may find plenty to like among dividend growth funds. We asked our analysts to share some of their favorites.
Katie Reichart: T. Rowe Price Dividend Growth receives a Morningstar Analyst Rating of Silver. Tom Huber has run the fund since 2000. He emphasizes free cash flow and capital allocation by management teams to ensure that his holdings will continue to pay dividend and grow them. The fund's diversified portfolio and focus on financially stable companies has given it a tame risk profile. During Huber's tenure it's lost just 79%, as much as the S&P 500 Index in market downturns. Growth-led markets aren't its strong suit; it lagged in 2017, for instance. However, long-term risk-adjusted results are solid, and the fund also has below-average expenses.
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Susan Dziubinski does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.