What is a Dividend Fund?

A dividend fund is a type of mutual fund which invests exclusively in equity shares which pay regular dividends.

How Does a Dividend Fund Work?

A dividend fund seeks to provide investors with income from common and preferred shares of stock which yield dividends in cash and stock (in some cases) on a regularly-occurring basis. It is the opposite of a growth fund, which seeks to provide investors with long-term appreciation of capital.

Why Does a Dividend Fund Matter?

A dividend fund is a good choice for investors seeking regular income payments over appreciation. Investors should be aware that a poor market climate might result in certain companies' not paying dividends along with decreased fund value.

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Paul Tracy
Paul Tracy

Paul has been a respected figure in the financial markets for more than two decades. Prior to starting InvestingAnswers, Paul founded and managed one of the most influential investment research firms in America, with more than 3 million monthly readers.

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