5 High Dividend Mutual Funds for Your Portfolio
By: Ned Piplovic,
High dividend mutual funds still can provide steady returns even though exchange-traded funds (ETFs) are gaining popularity as the investment of choice for investors seeking easy diversification.
To maximize one’s investment returns, investors can seek out high dividend mutual funds that offer robust asset appreciation in addition to steady income distributions in order to produce strong total returns over an extended time horizon.
The list below contains five high dividend mutual funds with high dividend yields:
5 High Dividend Mutual Funds for Your Portfolio: #5
Cohen & Steers Global Realty Shares – Class A (NASDAQ:CSFAX)
The Cohen & Steers Global Realty Shares fund invests its total assets in common stocks and other equity securities issued by global real estate companies, including real estate investment trusts and similar investment vehicles. Under normal market conditions, the fund targets investing at least 40% of its assets in foreign companies and companies conducting a significant share of their business outside the United States. In distressed global markets, such as the current global economic downturn triggered by the COVID-19 virus outbreak, the fund reduces the foreign markets exposure to at least 30%.
As of January 13, 2021, the fund allocated more than $67 million in assets across 92 individual holdings. At 5.93% share, Prologis, Inc. (NYSE:PLD) was the top holding and one of two individual stocks that accounted for more than 5% of the fund’s assets — the other is Public Storage (NYSE:PSA) with 5.17%. All other holdings contributed individually 3.7% or less. The top 10 holdings accounted for more than 33% of the fund’s total assets and included only two foreign equities — Japanese real estate company Mitsui Fudosan Co., Ltd. (JPX:8801.T) and German company Vonovia SE.
The fund enhanced its annual dividend distribution payout four-fold over a five-year period. This rapid growth corresponds to an average dividend growth rate of nearly 32% per year. The current 30-day yield is 1.7%, and the fund has averaged an annual growth rate of 6.32% per year for the last ten years.
5 High Dividend Mutual Funds for Your Portfolio: #4
PGIM Global Dynamic Bond Fund (NASDAQ:PAJAX)
This fund invests in bonds representing a variety of securities and instruments. Under normal market conditions, the fund invests at least 80% of its assets in fixed income securities. The fund targets to invests at least 40% of its net assets in foreign securities.
As of January 13, 2021, the fund had nearly $68 million in assets allocated between well over a thousand bonds and other holdings.
Since its inception in 2015, the fund has enhanced its annual dividend distribution 127%. This advancement corresponds to an average dividend growth rate of nearly 23% per year. The funds annualized dividend payout converts to a 4.56% yield, which is in line with fund’s own yield average over the past five years.
After briefly hitting its new all-time high in mid-December 2019, the share price delivered gains of 1.4% over the trailing 12 months. While relatively low, this asset appreciation contributed nearly one quarter of the funds 6% total one-year returns. The total returns topped 16.6% over the last three years and exceeded 40.3% in the last five.
5 High Dividend Mutual Funds for Your Portfolio: #3
AB Total Return Bond Portfolio (NASDAQ:ABQIX)
The AB (AllianceBernstein) Total Return Bond Portfolio seeks to deliver gains through a core fixed-income strategy with a global, multi-sector approach. While the fund targets primarily investment-grade bonds, the fund might allocate up to 25% of its assets into below-investment grade bonds. Furthermore, the fund seeks investments with a range of maturities.
As of January 13, 2021, the fund had nearly $381 million in total net assets. The top equity category — 2 year treasury notes with 47.76% — accounted for nearly half of the fund’s total assets.
The fund’s current annualized dividend distribution is equivalent to a 2.98% dividend yield. The asset appreciation and the dividend income distributions rewarded investors with a combined total return of nearly 6.25% over the past year, as well as total returns of 15.4% and 24.1% over the past three and five years, respectively.
5 High Dividend Mutual Funds for Your Portfolio: #2
Astor Macro Alternative Fund (NASDAQ:GBLMX)
The Astor Macro Alternative Fund seeks to achieve its growth by investing primarily in exchange-traded funds (ETFs). The fund uses multiple quantitative strategies over a broad variety of asset classes and countries to generate high risk-adjusted returns with lower volatility than the global equity markets.
As of January 13, 2021, just three out of the fund’s 20 holdings — Invesco QQQ Trust (NASDAQ:QQQ) with 33.8%, iShares 20+ Year Treasury Bond ETF (NASDAQ:TLT) with 18.7% and Invesco S&P 500 Pure Growth ETF (NYSE:RPG) with 10.1% — accounted for 63% of total assets. The top 10 holdings accounted for more than 90% of the Fund’s assets. While underlying holdings originated from 10 different countries, nearly 80% of assets were from equities based in the United States. All other countries represented less than 12% of total assets. Through the underlying ETFs, approximately two thirds of assets were invested in stocks and nearly 20% in bonds.
The fund’s most recent dividend distribution of $0.11 is equivalent to a 3.6% forward dividend yield. A significant dividend spike in 2019 pushed the current yield 67% higher than the fund’s own 3.51% average yield over the past five years.
This yield may appear typical, but it is somewhat flattened by the fund’s continually growing share price these last several years. It has returned 12.1% in capital appreciation in the trailing 12 months, 31.2% in the last three years, and 54.5% in the trailing five years.
5 High Dividend Mutual Funds for Your Portfolio: #1
PIMCO Real Estate Real Return Strategy Fund (NASDAQ:PETCX)
The PIMCO Real Estate Real Return Strategy Fund seeks to capture the performance potential through derivative exposure to the Dow Jones U.S. Select Real Estate Investment Trust (REIT) Index. This exposure is collateralized with a portfolio of Treasury Inflation-Protected Securities (TIPS) that provide additional return and inflation hedging potential.
As of January 13, 2021, the fund’s individual holdings combined for $1.32 billion in total assets. Aside from 14% of assets invested in diversified real estate opportunities, the fund has allocated nearly 23% of its assets into residential apartments. An additional 12.4% of the fund’s assets comprises warehousing and industrial facilities. Additionally, office real estate properties account for more than 10% of net assets. These top four categories combine for nearly 60% of the fund’s total assets.
The fund has hiked its quarterly distributions more than 35-fold over the past four years, which corresponds to an average growth rate of 144% per year. The fund’s current dividend distribution is equivalent to a 4.42% forward dividend yield.
Due to some recent volatility, the fund’s share price has dropped 8.9% in the trailing 12 months. In the last three and five years, however, it has grown 14.7% and 26.9%, respectively.
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Ned Piplovic is the assistant editor of website content at Eagle Financial Publications. He graduated from Columbia University with a Bachelor’s degree in Economics and Philosophy. Prior to joining Eagle, Ned spent 15 years in corporate operations and financial management. Ned writes for www.DividendInvestor.com and www.StockInvestor.com.