Be Patient With This Dividend Fund
One key to T. Rowe Price Dividend Growth's strategy is losing less in bad years.

Many investors consider buying stocks in firms that steadily raise their dividends to be an all-weather strategy. In truth, funds that focus on dividend-growth stocks tend to hold up better than the broad market in stormy times, although they often lag when skies are clear.
Take T. Rowe Price Dividend Growth (symbol PRDGX). Although the fund delivered respectable results over the past year, it trailed Standard & Poor’s 500-stock index by 3.3 percentage points. The fund lost ground after last November’s election as investors, expecting improved economic growth, ditched high-quality, dividend-paying stocks for riskier fare, says Bill Nolan, a Price executive who works closely with Dividend Growth’s manager, Thomas Huber. Another factor that has hurt the fund’s relative results: a shortage of technology stocks, which have performed strongly for most of the past year. Tech stocks account for just 12% of the fund’s assets, compared with 22% in the S&P 500.
Of course, you can’t deliver a double-digit return without some good stock picks. Strong gains in financial-services shares helped the fund, led by Morgan Stanley (up 66% over the past 12 months), State Street (44%) and TD Ameritrade Holding (54%).
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.

Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Huber favors large, sturdy firms with solid balance sheets that generate strong free cash flow (cash profits after capital expenditures) and can consistently raise payouts. JPMorgan Chase, Microsoft and health insurer UnitedHealth Group topped the portfolio’s list of 109 stocks as of June 30.
When Huber buys, he holds for a long time. His fund’s annual turnover of 11% suggests an average holding period of nine years. “You can make a mistake by selling something just because it has done well,” he says. Valuations matter, but strong stock performance, a good corporate culture and a management team that’s executing well are signs of a durable business, he says.
Over the long haul, Huber has outpaced the market, in part by losing less in bad years. For instance, in 2008, his fund lost 33%; the S&P 500, 37%. From March 2000, when Huber became manager, through July 31, Dividend Growth earned 7.1% annualized, topping the S&P 500 by an average of 2.2 percentage points per year.
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.

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.
-
The Most Popular Apps for Retirement Planning in 2025
A J.D. Power survey ranks retirement planning apps based on customer service and satisfaction. Does your financial app make the cut?
-
Don't Disinherit Your Grandchildren: The Hidden Risks of Retirement Account Beneficiary Forms
Standard retirement account beneficiary forms may not be flexible enough to ensure your money passes to family members according to your wishes. Naming a trust as the contingent beneficiary can help avoid these issues. Here's how.
-
The Most Tax-Friendly States for Investing in 2025 (Hint: There Are Two)
State Taxes Living in one of these places could lower your 2025 investment taxes — especially if you invest in real estate.
-
The Final Countdown for Retirees with Investment Income
Retirement Tax Don’t assume Social Security withholding is enough. Some retirement income may require a quarterly estimated tax payment by the September 15 deadline.
-
Dividends Are in a Rut
Dividends may be going through a rough patch, but income investors should exercise patience.
-
Municipal Bonds Stand Firm
If you have the cash to invest, municipal bonds are a worthy alternative to CDs or Treasuries – even as they stare down credit-market Armageddon.
-
The Kiplinger 25: Our Favorite No-Load Mutual Funds
The Kiplinger 25 The Kiplinger 25 is a list of our top no-load mutual funds that have proven capable of weathering any storm.
-
High Yields From High-Rate Lenders
Investors seeking out high yields can find them in high-rate lenders, non-bank lenders and a few financial REITs.
-
Time to Consider Foreign Bonds
In 2023, foreign bonds deserve a place on the fringes of a total-return-oriented fixed-income portfolio.
-
The 5 Best Actively Managed Fidelity Funds to Buy and Hold
mutual funds Sometimes it's best to leave the driving to the pros – and these actively managed Fidelity funds do just that, at low costs to boot.