Dividend Mutual Fund Reduces Dividend by 17%. Surprised?

RBC’s Canadian Dividend Fund had a dividend of 66¢ in 2009 and 2010. Now this fund’s dividend is 55¢. What ever happened to dividend growth? In addition to the high fees, this is another example of why mutual funds should be avoided.

Tom Connolly from DividendGrowth.ca had this to say about it:

“Never having purchased a mutual fund, I was fascinated to learn from Rob’s research that RBC’s Canadian Dividend Fund had a dividend of 66¢ in 2009 and 2010. Now this fund’s dividend is 55¢. Dividends paid by the country’s biggest dividend fund went down by 11¢ over this period. So much for dividend growth inside mutual funds! Their goal, it seems, is not the same as ours. What we do is different: we buy individual dividend growth stocks and hold for the increasing yield. We win by holding: funds trade too much.”

Avoid mutual funds, and buy your own high quality dividend paying stocks when they are undervalued.

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One Response to “Dividend Mutual Fund Reduces Dividend by 17%. Surprised?”

  1. Evan says:

    One of the reasons I like building my own (very) mini-mutual fund of dividend stocks…

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