7 Best Mutual Funds to Collect Stock Dividends

Some things never seem to grow old, including the love investors have for dividend stocks.

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Some things never seem to grow old, including the love investors have for dividend stocks. There’s a good reason we love dividends. Between 1930 and 2012, they accounted for about 40% of the total return of Standard & Poor’s 500-stock index, according to a Morgan Stanley study. Here are our favorite dividend-stock mutual funds—two index funds and five actively managed portfolios. The list, with one exception (Vanguard High Dividend Yield Index Fund), is made up of funds that invest in so-called “dividend growers”—companies that consistently raise their payouts. All of the funds have one thing in common: They have been less volatile than the S&P 500 over the past one, three, five and 10 years.

All returns and data are through February 1. Click on ticker-symbol links for current prices and more.

Nellie S. Huang
Senior Associate Editor, Kiplinger's Personal Finance

Nellie joined Kiplinger in August 2011 after a seven-year stint in Hong Kong. There, she worked for the Wall Street Journal Asia, where as lifestyle editor, she launched and edited Scene Asia, an online guide to food, wine, entertainment and the arts in Asia. Prior to that, she was an editor at Weekend Journal, the Friday lifestyle section of the Wall Street Journal Asia. Kiplinger isn't Nellie's first foray into personal finance: She has also worked at SmartMoney (rising from fact-checker to senior writer), and she was a senior editor at Money.