Investors seeking regular income flows and having the willingness to forgo capital growth often select equity funds promising income for their investment needs. The presence of both debt and equity income funds in a portfolio also increases diversification. Further, equity income funds provide a steady and regular income stream from dividends which can go a long way in healing losses made by falling stock prices. Equity income funds provide investors with a convenient method of holding a diversified portfolio which generates a regular income stream.
Below we will share with you 5 top rated Equity Income mutual funds. Each has earned a Zacks #1 Rank (Strong Buy) as we expect these mutual funds to outperform their peers in the future. To view the Zacks Rank and past performance of all Equity Income funds, investors can click here to see the complete list of funds.
Putnam Equity Income A (PEYAX) invests a large proportion of its assets in mid cap and large cap companies which can deliver growth and generate income. The fund focuses on investing in under-valued companies. The equity income mutual fund has a three year annualized return of 24.49%.
Darren A. Jaroch is the fund manager and he has managed this equity income mutual fund since 2012.
AllianceBernstein Value A (ABVAX) seeks capital growth on a long term basis. The fund invests in an equity portfolio consisting of 95 to 150 large cap under-valued U.S. companies. At times, the fund may invest in ETFs instead of equity securities. The equity income mutual fund returned 27.35% in the last one year period.
The equity income mutual fund has an expense ratio of 1.11% compared to a category average of 1.21%.
John Hancock II Equity Income (JIEMX) invests 65% of its assets primarily in equity securities with proven track records of paying out above average steady dividends. The fund may invest in fixed income securities regardless of rating or quality. However, not more than 10% of its assets are invested in junk bonds. The equity income mutual fund has a five year annualized return of 23.75%.
As of May 2013, this equity income mutual fund held 121 issues, with 2.86% of its total assets invested in JPMorgan Chase & Co.
Fidelity Equity-Income (FEQIX) seeks reasonable income with capital growth as a secondary objective. The fund invests the majority of its assets in income equity securities which generate income. It invests in both domestic and foreign securities. The equity income fund returned 23.61% in the last one year period.
James Morrow is the fund manager and he has managed this equity income mutual fund since 2011.
Vanguard Equity-Income (VEIPX) invests in mid cap and large cap equity securities with proven track records of paying out above average steady dividends. Companies which have growth potential are also considered for investment. The equity income mutual fund has a ten year annualized return of 21.69%.
The equity income mutual fund has an expense ratio of 0.30% compared to a category average of 1.21%.
To view the Zacks Rank and past performance of all Equity Income mutual funds, investors can click here to see the complete list of funds.
About Zacks Mutual Fund Rank
By applying the Zacks Rank to mutual funds, investors can find funds that not only outpaced the market in the past but are also expected to outperform going forward. Learn more about the Zacks Mutual Fund Rank at http://www.zacks.com/funds.
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