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A Guide to High Dividend Mutual Funds

A Guide to High Dividend Mutual Funds

High dividend mutual funds are a type of mutual fund that offer a higher potential for return on investment that many other types of mutual funds.  They are a more risky investment than many mutual funds, but come with a higher opportunity for return on that investment.  High dividend mutual funds allow you to diversify your portfolio and include some higher yield investments without some of the higher risk that is often associated with high yield investments.  They are a popular choice for those looking for high return and diversification but may not have a great tolerance for risk.

There are many types of high dividend mutual funds, and a few of these types are considered to the best choices for a stable and likely return on investment.  First of all, emerging market mutual funds are one of the best choices and are showing excellent dividends on a regular basis.  The ING Russia Fund is an example of this type of high dividend mutual fund in this area that has performed well in the past decade.  Natural resources mutual funds as well as precious metal mutual funds have also been very strong in recent years and shown high yields consistently.  These are all very good choices for those seeking a high dividend mutual fund option that is diverse as well as on the lower end of the risk scale.

In addition to the ING Russia Fund, there are several other high dividend mutual funds that have been listed as the top performers in the past decade.  These include the USAA Precious Metals and Minerals Fund, The BlackRock Global Resources Fund, the Icon Funds Icon Energy Fund and the Evergreen Precious Metals Fund.  All of these are considered sound investments for anyone seeking high dividend mutual funds to their portfolio.

Before you invest in any high dividend mutual funds you should make certain to do your research and get all of the available information on the fund itself.  The fund’s track record for dividends and the level of risk you will take on when investing in that fund are important factors in deciding whether or not you should invest in that mutual fund.  Your financial advisor can help you to select the right high dividend mutual funds for your portfolio.  Sit down and discuss your investment needs and your risk tolerance level with your financial advisor to help determine if high dividend mutual funds are right for you, and if so which ones you should choose.

As with any investment that offers a higher return, high dividend mutual funds carry a higher risk level.  Many people turn to mutual funds because they are less risky that other investments, but choosing high dividend mutual funds is a great way to expand your return on investment, take some risk, but still stay within your comfort zone.  Every investment has a risk associated with it, and you should seek expert advice on the risks involved if you are new to investing in mutual funds before you put your money in any fund.

Photo courtesy of Vincent Desjardins.

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