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3 Best Dividend-Paying Mutual Funds to Buy in October
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In times of economic uncertainty, characterized by various indicators, dividend mutual funds emerge as a reliable investment option. These funds provide a steady income and offer stability in turbulent market conditions.
Recent data reports indicate a decline in consumer sentiment and an increasing expectation of inflation. These factors may impact the market by potentially causing heightened market volatility. In October, the University of Michigan's consumer sentiment index dropped to 63 from its previous level of 68.1 in September. Similarly, the Bureau of Labor Statistics reported a 0.5% month-over-month increase in the Producer Price Index (PPI) for September, surpassing consensus estimate of a 0.3% rise.
However, Core PPI, which excludes volatile energy and food prices, remained steady as predicted, with a 0.3% increase in September. On an annual basis, PPI demonstrated a gradual upward trend, increasing by 2.2% in September after having previously risen by 2% in August. Likewise, Core PPI indicated an annual increase of 2.8% in September, following a surge of 2.9% in the preceding month of August.
The Consumer Price Index (CPI) in September witnessed a month-over-month increase of 0.4%, surpassing the consensus estimate of a 0.3% rise. Additionally, the Core CPI, which excludes the typically volatile food and energy prices, aligned with expectations by climbing 0.3% during September.
In current economic trend dividend mutual funds present themselves as a prudent investment choice as it offers a steady stream of income in an uncertain economic environment as well as it offers capital appreciation and diversification during the economic downturn.
We have, thus, selected three mutual funds that have a promising dividend yield, have given impressive 3-year and 5-year annualized returns, boast a Zacks Mutual Fund Rank #1 (Strong Buy) or 2 (Buy), offer a minimum initial investment within $5,000 and carry a low expense ratio as compared to its category average.
Invesco SteelPath MLP Income Fund (MLPZX - Free Report) seeks total return by investing most of its assets, along with borrowings, if any, in master limited partnerships with companies that are engaged in transportation, storage, processing, refining, marketing, exploration, production, and mining of minerals and natural resources. MLPZX also invests in derivatives and other instruments that have similar economic characteristics.
Stuart Cartner has been the lead manager of MLPZX since Mar 30, 2010, and most of the fund’s holdings are in Energy Transfer LP (14.2%), MPLX LP (13.7%) and NuStar Energy L.P. (8.5%) as of May 31, 2023.
MLPZX’s dividend yield is 6.9%. The fund’s 3-year and 5-year annualized returns are 40.4% and 8.4%, respectively. The annual expense ratio of 1.13% is lower than the category average of 1.56%. MLPZX has a Zacks Mutual Fund Rank #1.
To see how this fund performed compared to its category and other 1 and 2 Ranked Mutual Funds, please click here.
Bridges Investment Fund (BRGIX - Free Report) invests most of its assets in a diversified portfolio of common stocks of domestic companies that its fund advisors believe to have the potential for increased earnings and dividends over time. BRGIX advisors also invest in U.S. dollar-denominated securities of foreign issuers and American Depositary Receipts traded on U.S. exchanges or over-the-counter markets.
Edson L. Bridges has been the lead manager of BRGIX since Apr 10, 1997, and most of the fund’s holdings are in companies like Apple (10.6%), Microsoft (8.8%) and Amazon.com, Inc. (6.4%) as of Jun 30, 2023.
BRGIX’s dividend yield is 5.3%. The fund’s 3-year and 5-year annualized returns are 9.8% and 10.9%, respectively. The annual expense ratio of 0.75% is almost in line with the category average of 0.99%. BRGIX has a Zacks Mutual Fund Rank #1.
Parametric Commodity Strategy Fund (EAPCX - Free Report) invests in commodity-linked derivatives instruments such as commodity index-linked swap agreements, futures, and commodity-linked notes backed by fixed-income securities, including U.S. Treasury securities and money-market instruments.
Thomas C. Seto has been the lead manager of EAPCX since May 24, 2011. Most of the fund’s holdings were in short-term investments (88%) others (7.7%) and SPDR Gold MiniShares (4.3%) as of Jun 30, 2023.
EAPCX’s dividend yield is 14.5%. The fund’s 3-year and 5-year annualized returns are 18.6% and 10.7%, respectively. The annual expense ratio of 0.92% is almost in line with the category average of 1.11%. EAPCX has a Zacks Mutual Fund Rank #1.
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3 Best Dividend-Paying Mutual Funds to Buy in October
In times of economic uncertainty, characterized by various indicators, dividend mutual funds emerge as a reliable investment option. These funds provide a steady income and offer stability in turbulent market conditions.
Recent data reports indicate a decline in consumer sentiment and an increasing expectation of inflation. These factors may impact the market by potentially causing heightened market volatility. In October, the University of Michigan's consumer sentiment index dropped to 63 from its previous level of 68.1 in September. Similarly, the Bureau of Labor Statistics reported a 0.5% month-over-month increase in the Producer Price Index (PPI) for September, surpassing consensus estimate of a 0.3% rise.
However, Core PPI, which excludes volatile energy and food prices, remained steady as predicted, with a 0.3% increase in September. On an annual basis, PPI demonstrated a gradual upward trend, increasing by 2.2% in September after having previously risen by 2% in August. Likewise, Core PPI indicated an annual increase of 2.8% in September, following a surge of 2.9% in the preceding month of August.
The Consumer Price Index (CPI) in September witnessed a month-over-month increase of 0.4%, surpassing the consensus estimate of a 0.3% rise. Additionally, the Core CPI, which excludes the typically volatile food and energy prices, aligned with expectations by climbing 0.3% during September.
In current economic trend dividend mutual funds present themselves as a prudent investment choice as it offers a steady stream of income in an uncertain economic environment as well as it offers capital appreciation and diversification during the economic downturn.
Mutual funds, in general, reduce transaction costs and diversify portfolios without an array of commission charges that are mostly associated with stock purchases (read more: Mutual Funds: Advantages, Disadvantages, and How They Make Investors Money).
We have, thus, selected three mutual funds that have a promising dividend yield, have given impressive 3-year and 5-year annualized returns, boast a Zacks Mutual Fund Rank #1 (Strong Buy) or 2 (Buy), offer a minimum initial investment within $5,000 and carry a low expense ratio as compared to its category average.
Invesco SteelPath MLP Income Fund (MLPZX - Free Report) seeks total return by investing most of its assets, along with borrowings, if any, in master limited partnerships with companies that are engaged in transportation, storage, processing, refining, marketing, exploration, production, and mining of minerals and natural resources. MLPZX also invests in derivatives and other instruments that have similar economic characteristics.
Stuart Cartner has been the lead manager of MLPZX since Mar 30, 2010, and most of the fund’s holdings are in Energy Transfer LP (14.2%), MPLX LP (13.7%) and NuStar Energy L.P. (8.5%) as of May 31, 2023.
MLPZX’s dividend yield is 6.9%. The fund’s 3-year and 5-year annualized returns are 40.4% and 8.4%, respectively. The annual expense ratio of 1.13% is lower than the category average of 1.56%. MLPZX has a Zacks Mutual Fund Rank #1.
To see how this fund performed compared to its category and other 1 and 2 Ranked Mutual Funds, please click here.
Bridges Investment Fund (BRGIX - Free Report) invests most of its assets in a diversified portfolio of common stocks of domestic companies that its fund advisors believe to have the potential for increased earnings and dividends over time. BRGIX advisors also invest in U.S. dollar-denominated securities of foreign issuers and American Depositary Receipts traded on U.S. exchanges or over-the-counter markets.
Edson L. Bridges has been the lead manager of BRGIX since Apr 10, 1997, and most of the fund’s holdings are in companies like Apple (10.6%), Microsoft (8.8%) and Amazon.com, Inc. (6.4%) as of Jun 30, 2023.
BRGIX’s dividend yield is 5.3%. The fund’s 3-year and 5-year annualized returns are 9.8% and 10.9%, respectively. The annual expense ratio of 0.75% is almost in line with the category average of 0.99%. BRGIX has a Zacks Mutual Fund Rank #1.
Parametric Commodity Strategy Fund (EAPCX - Free Report) invests in commodity-linked derivatives instruments such as commodity index-linked swap agreements, futures, and commodity-linked notes backed by fixed-income securities, including U.S. Treasury securities and money-market instruments.
Thomas C. Seto has been the lead manager of EAPCX since May 24, 2011. Most of the fund’s holdings were in short-term investments (88%) others (7.7%) and SPDR Gold MiniShares (4.3%) as of Jun 30, 2023.
EAPCX’s dividend yield is 14.5%. The fund’s 3-year and 5-year annualized returns are 18.6% and 10.7%, respectively. The annual expense ratio of 0.92% is almost in line with the category average of 1.11%. EAPCX has a Zacks Mutual Fund Rank #1.
Want key mutual fund info delivered straight to your inbox?
Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing mutual funds, each week. Get it free >>