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Dividend Darlings: 3 Mutual Funds to Buy

These mutual funds offer a combo of sturdy performance and yield

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Dividend Darlings: 3 Mutual Funds to Buy

Vanguard Wellington

Vanguard Dividend Darlings: 3 Mutual Funds to BuyTrailing 12-Month Yield: 2.6%

My first recommendation — the Vanguard Wellington Fund (VWELX) — is a grandaddy of the mutual fund industry. At 84 years old, Wellington is the nation’s oldest balanced fund.

Morningstar gives Wellington a five-star “gold” rating, and that’s because of its consistent performance. VWELX is up almost 12% so far in 2013, and it has had only one negative year in the past 2011 — that was in 2008, when Wellington lost 22.3%. (But the S&P 500 lost 37%.) During the past 15 years, VWELX has achieved an annualized total return of 7.7%, which is 210 basis points higher than the index.

It’s important to understand that as a balanced fund, Wellington has a bond component that has played havoc with its performance in recent years. Not to worry, though — VWELX’s 103 stock holdings still represent 64% of its $75.1 billion portfolio. The fund’s top 10 holdings represent 15% of the overall portfolio, and are led by Wells Fargo (WFC) at 2.2%, followed by Exxon Mobil (XOM), JPMorgan (JPM), Merck (MRK) and Microsoft (MSFT).

Meanwhile, Wellington’s management fees are unsurprisingly low — as is Vanguard’s way — at just 0.25%, which is about 75% lower than other similar funds.

Vanguard’s reputation is hard to beat, as is Wellington’s performance. If you’re looking for something tried and true, this mutual fund is it.


Article printed from InvestorPlace Media, http://investorplace.com/2013/09/dividend-darlings-3-mutual-funds-to-buy/.

©2014 InvestorPlace Media, LLC

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