8 DIVIDEND FUNDS TO CONSIDER NOW

Our picks deliver a diversified portfolio of dividend stocks.

- BY NELLIE S. HUANG

DIVIDEND stocks have struggled of late as fast-growing tech stocks that pay little in the way of dividends have captured all the attention.

But things may be about to change.

For starters, lower interest rates are on the way as the Federal Reserve continues to ease monetary policy. “On balance,” says T. Rowe Price’s Tom Huber, “lower interest rates are a net positive for dividend stocks” as investors go searching for income beyond the shrinking yields of money market funds.

What’s more, U.S. stocks are richly valued these days, says Aniket Ullal, head of ETF research and analytics at CFRA Research. Investors who worry that prices are getting a bit too high in this growth-driven market, he adds, should consider dividend fund strategies, which tend to be less volatile and more value focused and thus are “a hedge against a potential downturn in growth-oriented sectors like technology and communications services.”

See our annual update on the Kiplinger Dividend 15, beginning on page 18, for the latest on our favorite dividend stocks. But you may prefer a fund, which offers an efficient way to build a diversified portfolio of dividend stocks across multiple sectors and industries.

To that end, we set out to find good candidates. Though a handful are members of the Kiplinger 25, our favorite actively managed, no-load funds, or the Kiplinger ETF 20, our favorite exchange-traded funds, we found a few others worth mentioning, too. Each of the eight dividend strategies we highlight below have their own approach. A fund might favor steady businesses that pay stable dividends, focus on higher yields or look for companies that are hiking dividend payouts. Some funds pursue a combination of strategies or emphasize different ones at different times. We also found a few international funds to consider. Prices, returns and other data are through September 30, unless otherwise noted.