6 Best Monthly Dividend Stock Mutual Funds to Buy Now
By: Olivia Faucher,
Mutual funds provide investors with the opportunity to capture the returns of an entire segment of the market without having to buy and sell individual stocks and bonds.
This ability to diversify across many investments with the purchase of a single mutual fund is one of the main reasons such funds are so appealing to investors. The following list is made up of six mutual funds that specialize in investing in stocks that pay dividends.
These mutual funds were chosen on the basis that they pay monthly dividends, have had a strong performance for many years and carry a relatively low net expense ratio. The list also provides variety in terms of the types of investments (foreign stocks, domestic stocks, large value companies, etc.)
The mutual funds on the list have also all paid out an attractive dividend yield over the last 12 months. Given the fluctuation of dividend payout amounts recently, the company’s dividend yield has been vacilating.
Below is the list of six monthly dividend stock mutual funds to buy now, sorted in ascending order by dividend yield:
6 Monthly Dividend Stock Mutual Funds to Buy Now: #6
Centre Global Infrastructure Fund Investor Class (NASDAQ: DHIVX)
Dividend yield ttm: 2.87%
This mutual fund invests in attractive infrastructure-related companies from the United States and other developed international economies. The fund invests in large-cap value companies (values greater than $10 billion) that the fund managers believe have been undervalued by the market.
Roiughly 71.03% of the fund is invested in the communication and utilities sectors, making up 37.99% and 33.04% of the portfolio, respectively. The portfolio further is split roughly 50/50 between domestic stocks and foreign stocks, with slightly more foreign stock.
Most of the foreign securities are from the eurozone, followed by Canada and Japan. The fund has 65 total holdings, contributing to its $44.3 million in assets. Roughly 43% of the assets are held within the top 10 securities.
Since the fund’s inception in 2018, its price has been on a steady upward trend, reaching an all-time high of $10.92 in February 2020 before dropping all the way down to $7.23 in March 2020 due to the financial crisis. Since that significant hit, the price has been recovering to reach the price of $9.09 where it currently sits. The fund has a net expense ratio of 1.37%.
The current monthly dividend payout is $0.023, meaning the annualized payout is $0.26 equating to a dividend yield of 2.87%. Since the fund’s inception in 2018, it has achieved two consecutive years of dividend growth in the past, with a 3.81% growth rate in the past 12 months.
6 Monthly Dividend Stock Mutual Funds to Buy Now: #5
Federated Hermes International Strategic Value Dividend Fund Class A Shares (NASDAQ: IVFAX)
Dividend yield ttm: 3.53%
IVFAX is a mutual fund that focuses on large-cap value foreign stocks. The fund primarily invests in equity securities of companies based in countries outside the United States, consisting principally of high dividend-paying stocks with dividend growth potential. The countries where the fund holds the most securities are Canada, the United Kingdom and Italy.
Since its inception in 2008, the fund’s highest price reached $4.53. It is currently trading at $3.28, after dropping as low as $2.59 in March 2020 as a result of the financial crisis. The fund’s net expense ratio is 1.11%.
The fund’s most recent monthly dividend payout was $0.01, corresponding to an annual payout of $0.12. The dividend has grown 8.06% in the last three years.
The fund holds a total of $369.8 million in assets, spread across 43 total securities. The majority of the fund’s holdings are within the utilities, financials and communications sectors.
6 Monthly Dividend Stock Mutual Funds to Buy Now: #4
Federated Hermes Global Strategic Value Dividend Fund Class A Shares (NASDAQ: GVDSX)
Dividend yield ttm: 3.66%
This fund pursues income and long-term capital appreciation by investing primarily in high-dividend-paying stocks of U.S. and non-U.S. companies with dividend growth potential. The fund offers the potential for competitive upside performance in strong market environments and the chance for lower downside risk in weak markets. It will typically invest at least 30% of its assets outside the United States.
The fund comprises 54 holdings totaling $2 million in assets. Its top 10 holdings make up 32% of the total assets. Most of the fund’s securities are found within the health care, utilities and communications sectors. The three countries where the fund invests the most are the United States, Canada and the United Kingdom.
GVDSX is currently trading at a price of $4.77 after falling from $5.60 to $3.68 in March 2020. The fund has a net expense ratio of 1.12%. Its most recent monthly dividend was $0.0133, making the annualized payout $0.17.
6 Monthly Dividend Stock Mutual Funds to Buy Now: #3
Federated Hermes International Strategic Value Dividend Fund Institutional Shares (NASDAQ: IVFIX)
Dividend yield ttm: 3.79%
This fund invests primarily in high-dividend-paying stocks of international companies with dividend growth potential. IVFIX focuses on developed markets and seeks a higher dividend yield than that of the broad international equity market.
IVFIX is made up of 43 stocks, totaling $369.8 million in assets. The top 10 holdings contribute to 38% of the fund’s total assets. The majority of the fund’s securities are found within the utilities, financial services and communications industries.
IVFIX is currently trading at a price of $3.28 with a net expense ratio of 0.86%. In the 11 years since its inception, the fund has delivered positive annual total returns in eight of those years, with an average annual positive return of 11.05%. The fund’s latest dividend distribution was $0.011, making for an annualized payout of $0.12.
6 Monthly Dividend Stock Mutual Funds to Buy Now: #2
Cullen High Dividend Equity Fund Retail Class (NASDAQ:CHDEX)
Dividend yield ttm: 7.28%
This fund takes a disciplined, value approach by investing in large-capitalization companies with low price/earnings ratios, high dividend yields and strong prospects for long-term earnings and dividend growth. The fund invests in large-cap value stocks within the United States. Given an average five-year holding period, the fund follows a classic long-term value approach and is focused on company fundamentals, which can enhance shareholder returns and mitigate down market risk.
The fund’s 41 holdings make up its $1.0 billion in total assets. The top 10 holdings make up 35% of the entire portfolio. The top three sectors that the fund invests in are health care, financial services,and consumer staples.
CHDEX began paying a monthly dividend in 2003, and has achieved a five-year average dividend growth rate of 7.94% over the past five years. The fund’s latest dividend payout was $0.029, corresponding to an annual payout of $0.37. The dividend yield for the trailing 12 months is 7.28%.
The fund’s price fell 36% from 16.94 to 10.83 during March 2020 as a result of the financial crisis. CHDEX has recovered from that fall and is currently trading at $14.87, with a net expense ratio of 1.01%. The fund’s average annual returns over the last five years is 6.90%.
6 Monthly Dividend Stock Mutual Funds to Buy Now: #1
Federated Hermes Strategic Value Dividend Fund Institutional Shares (NASDAQ: SVAIX)
Dividend yield ttm: 14.13%
This fund aims to achieve income for its investors and long-term capital appreciation. It seeks a higher dividend yield than that of the broad equity market, and carries out this objective by investing in high-dividend-paying stocks of U.S. companies with dividend growth potential. SVAIX tracks the Dow Jones U.S. Select Dividend Index as its benchmark
The fund boasts $7 billion in assets, which are spread out across 38 holdings. Plus, 44% of the portfolio is held within its top 10 securities. The top three sectors that the fund invests in are utilities, health care and communication services.
The fund is currently trading around its average historical price at $4.75, with a net expense ratio of 0.81%. Over the last five years, the fund has provided its investors with a total return of 23.17%.
The fund’s last monthly dividend payout was $0.014, making for an annualized payout of $0.40. The fund has achieved a 10-year dividend growth rate of 4.25%.
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Olivia Faucher is an editorial intern with Eagle Financial Publications.