Investing in dividend mutual funds can be a strategic method to generate income while growing your portfolio. These funds not only generate a consistent stream of income through dividends, but they also have the potential for capital appreciation. Here’s a handpicked list of the top ten best dividend mutual funds, chosen for their performance, management, and reliability.
10 Best Dividend Mutual Funds
| Company Name | Ticker Symbol |
| Vanguard Dividend Growth Fund | VDIGX |
| T. Rowe Price Dividend Growth Fund | PRDGX |
| Fidelity Equity-Income Fund | FEQIX |
| American Funds Washington Mutual Investors Fund | AWSHX |
| BlackRock Equity Dividend Fund | MADVX |
| Schwab Dividend Equity Fund™ | SWDSX |
| Invesco Dividend Income Fund Investor | IAUTX |
| Columbia Dividend Income Fund | GSFTX |
| JPMorgan Equity Income Fund | OIEIX |
| Principal Equity Income Fund | PQIAX |
1. Vanguard Dividend Growth Fund (VDIGX)
Overview
The Vanguard Dividend Growth Fund focuses on high-quality companies with the potential for increasing dividends over time. Managed by Wellington Management, this fund invests primarily in large-cap stocks with strong balance sheets.
Highlights
- Expense Ratio: 0.27%
- Dividend Yield: 1.6%
- 5-Year Annualized Return: 11.8%
- AUM: $48.74 billion
2. T. Rowe Price Dividend Growth Fund (PRDGX)
Overview
With long-term capital growth, the T. Rowe Price Dividend Growth Fund seeks to deliver a high dividend income. Companies projected to pay and increase their dividends are the fund’s investment target.
Highlights
- Expense Ratio: 0.63%
- Dividend Yield: 1.5%
- 5-Year Annualized Return: 12.2%
Fidelity Equity-Income Fund (FEQIX)
Overview
This fund seeks both income and capital growth by investing primarily in income-generating equity securities. Fidelity manages the fund, which focuses on companies with solid financial health.
Highlights
- Expense Ratio: 0.60%
- Dividend Yield: 2.3%
- 5-Year Annualized Return: 9.8%
American Funds Washington Mutual Investors Fund (AWSHX)
Overview
American Funds Washington Mutual Investors Fund invests in firms with a track record of dividend payouts and good growth prospects. The fund is noted for its cautious investment strategy.
Highlights
- Expense Ratio: 0.58%
- Dividend Yield: 1.9%
- 5-Year Annualized Return: 10.4%
BlackRock Equity Dividend Fund (MDDVX)
Overview
BlackRock manages this product, which seeks long-term total return and current income. It focuses on large-cap firms that have a history of paying dividends.
Highlights
- Expense Ratio: 0.92%
- Dividend Yield: 2.8%
- 5-Year Annualized Return: 8.7%
6. Schwab Dividend Equity Fund (SWDSX)
Overview
The Schwab Dividend Equity Fund seeks dividend-paying, high-quality equities with solid fundamentals. It provides a cost-effective alternative for investors pursuing growth and income.
Highlights
- Expense Ratio: 0.87%
- Dividend Yield: 2.1%
- 5-Year Annualized Return: 9.5%
7. Invesco Dividend Income Fund (FSTUX)
Overview
This fund invests in dividend-paying equities with an eye toward long-term financial appreciation—Invesco’s methodical strategy results in a diverse portfolio of high-quality stocks.
Highlights
- Expense Ratio: 0.78%
- Dividend Yield: 3.0%
- 5-Year Annualized Return: 8.4%
8. Columbia Dividend Income Fund (LBSAX)
Overview
Columbia Dividend Income Fund intends to generate income and growth by investing in dividend-paying equities. The fund focuses on firms that pay out sustainable and rising dividends.
Highlights
- Expense Ratio: 0.89%
- Dividend Yield: 2.5%
- 5-Year Annualized Return: 9.0%
9. JP Morgan Equity Income Fund (HLIEX)
Overview
The JP Morgan Equity Income Fund invests in a diverse portfolio of income-generating equity assets. The fund’s emphasis on inexpensive stocks with high dividends makes it an excellent alternative for income-oriented investors.
Highlights
- Expense Ratio: 0.85%
- Dividend Yield: 2.7%
- 5-Year Annualized Return: 8.9%
10. Principal Equity Income Fund (PQIAX)
Overview
Principal Equity Income Fund seeks to invest in firms that have a track record of dividend payments. The fund’s diverse portfolio is designed to provide long-term growth and income.
Highlights
- Expense Ratio: 0.71%
- Dividend Yield: 2.4%
- 5-Year Annualized Return: 8.6%
Conclusion
Dividend mutual fund investment provides a well-rounded approach to income and growth. These top ten funds offer a unique combination of management knowledge, dividend yield, and performance. These funds are now among the top choices on the market, whether you are looking for high yields, consistent returns, or a combination of the two.
Consider your investment goals, risk tolerance, and the past performance of the dividend mutual fund you’re considering. Diversifying your investments across multiple funds also helps to maximize potential returns and control risk.