Good Morning Everyone. It’s time for the next post in our “Investing: The Ins and Outs of Dividends” series. Throughout this series (which I have loved writing) we have discussed everything about Dividends from Why You Should Consider Investing in Dividends to When You Should Not Consider Dividend Investing. Today we are going to examine some Dividend Mutual Funds from various Mutual Fund companies to help you find the best Dividend Mutual Funds for your investment portfolio.
Most major Financial Institutions and Investment Companies offer some form of Dividend Mutual Fund. You will notice that they all have similar qualities but the level of risk and the investment strategies can vary among different Mutual Funds.
Smart Dividend Investing
When we are choosing a Dividend Mutual Fund for your investment portfolio there are a few things that we should review on the Mutual Fund Profile to make sure that this Mutual Fund is a good fit for our investment portfolio. We should always look at the past performance of a Mutual Fund. Although past performance is absolutely no indication of future return we should be comfortable with the possible fluctuations in the daily unit price of the Mutual Fund. A Mutual Fund Profile usually displays the 1, 3, 5 and 10 year past performance. If we are comfortable with the fluctuations between the best and worst days then this Mutual Fund may be a good investment option for our investment portfolio.
Investors should review the Mutual Fund Investment Objectives before purchasing a particular Mutual Fund. The Investment Objective tells us about the investment strategy that the Fund Manager is using and what he/she hopes to achieve over the short, medium, and long term. The investment objective gives investors an idea of which types of Stocks and Bonds etc. the Mutual Fund Manager will purchase.
Investing in Dividend Mutual Funds
The Portfolio Analysis, the Sector Diversification, and the Top Ten Holdings are also very important for new investors to review when we are thinking about purchasing a Mutual Fund. The Portfolio Analysis basically shows us (in a pie chart) the asset allocation or the asset composition of a Mutual Fund. It shows the specific percentages of Cash, Fixed Income, Domestic Equity, and Foreign Equity within the Mutual Fund. The Sector Diversification shows investors in which sectors of the economy the Mutual Fund Manager invests. Examples of some sectors are Financials, Health Care, and Technology. If you want to invest in some of the sectors listed on the Mutual Fund Profile then it could be a good investment option.
The Top Ten Holdings of a Mutual Fund are also important to review because it lists the top companies stocks that are held in the Mutual Fund. We don’t want to hold stocks of the same companies in all of our Mutual Funds and this is why it’s important to review the Top Ten Holdings of a Mutual Fund.
Check out some of these Dividend Mutual Fund Profiles:
RBC Asset Management offers a US Dividend Fund
PH&N Funds has a Dividend Income Fund
HSBC offers clients a Dividend Income Fund
Fidelity has a Dividend Plus Fund
BMO Mutual Funds offers a Global Dividend Class
Be sure to check out the previous posts in our “Investing: The Ins and Outs of Dividends” series:
New Investment Strategies for the New Year
Why You Should Consider Investing in Dividends
Why Do Companies Pay Dividends
Are Dividends Better Than Stocks?
When You Should Not Get Into Dividend Investing
Important Dividend Information for Young Investors
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Tahnya is 30 years old and lives in Montreal Quebec. She graduated in 2005 from Concordia University, and she currently works for a major International Financial Institution. She recently launched http://www.mediamadam.ca/. You can follow her on Twitter @TahnyaP.