Mutual Fund: BlackRock Equity Dividend
Replacement ETF: Vanguard Mega Cap 300 Value Index
The BlackRock Equity Dividend (MUTF:MDDVX) is a dividend-focused large-cap fund, and a popular one at that, with $25 billion in assets.
The fund takes a conservative, long-term approach to investing, as reflected in its scant 3% turnover ratio. Top holdings include Chevron (NYSE:CVX), Wells Fargo (NYSE:WFC), JPMorgan (NYSE:JPM) and Exxon Mobil (NYSE:XOM). And had you gotten into MDDVX at the beginning of the year, you’d be looking at 12.31% returns for the year, which includes a 1.96% dividend yield.
Had you gotten into the Vanguard Mega Cap 300 Value Index ETF (NYSE:MGV), you’d be doing even better.
MGV is a similarly focused fund with big holdings in Chevron and Exxon, as well as AT&T (NYSE:T) and General Electric (NYSE:GE). To date, MGV has returned 15.27% — more than 200 basis points better. That’s thanks in part to a superior dividend yield of 2.78%, but also just 0.12% in expense fees, compared to nearly 0.98% for MDDVX.
And don’t forget, MDDVX also requires hefty 5.25% front-end load charge.