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.
"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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