03-27-2013, 05:15 PM
So a colleague today asked me what I think of dividend growth and high dividend mutual funds. I haven't thought about this too much myself, I think because I enjoy picking individual DG stocks and building my own fund. Why pay someone to do something I enjoy doing myself?!
I guess a mutual fund that focuses on dividends could be a good idea in some circumstances. If you simply don't have the time or interest to research individual stocks, for example. Or if you are starting with small sums, it is a quick way to diversify. Of course these are those pesky fees. Vanguard has the Vanguard Dividend Growth Fund (VDIGX), with a reasonable 0.31 percent expense ratio. But it looks like it is only yielding 2.24 percent? Can that be right? Anyone know what "SEC yield" actually means? I hope that is not a measure of actual distributions, because my little portfolio beats that by a mile. They also have a high dividend yield fund (VHDYX), but the yield looks only a little higher.
Any thoughts?
I guess a mutual fund that focuses on dividends could be a good idea in some circumstances. If you simply don't have the time or interest to research individual stocks, for example. Or if you are starting with small sums, it is a quick way to diversify. Of course these are those pesky fees. Vanguard has the Vanguard Dividend Growth Fund (VDIGX), with a reasonable 0.31 percent expense ratio. But it looks like it is only yielding 2.24 percent? Can that be right? Anyone know what "SEC yield" actually means? I hope that is not a measure of actual distributions, because my little portfolio beats that by a mile. They also have a high dividend yield fund (VHDYX), but the yield looks only a little higher.
Any thoughts?