American Century Investments is a well-known investment management firm that offers a wide range of mutual funds and ETFs to both retail and institutional investors. Many of its actively managed domestic equity funds have consistently generated significant dividend income for investors over the years. In this article, we will take a closer look at several American Century funds with high dividend yields and attractive dividend growth potential.
American Century Equity Income Fund has distributed high dividend yields
The American Century Equity Income Fund (TWEIX) invests primarily in U.S. dividend-paying stocks and has consistently distributed substantial dividend income to investors. The fund aims to provide current income along with long-term capital appreciation by investing in companies with strong fundamentals and proven track records of dividend growth. As of December 2022, the fund has a dividend yield of around 3.5%, which is significantly higher than the S&P 500’s average dividend yield of 1.6%. The fund has also grown its dividend payouts at an average annual rate of 10.8% over the past decade, demonstrating its ability to provide both high dividend yields today and attractive dividend growth in the long run.
American Century Value Fund focuses on undervalued dividend payers
Another American Century fund that provides noteworthy dividend distributions is the American Century Value Fund (TWVLX). This fund invests mainly in undervalued mid and large cap companies with dividends yields above the market average. The fund managers carefully research companies with share prices below intrinsic value and with the capacity to grow dividends over time. The fund has distributed dividend yields around 2.5% in recent years, greater than the S&P 500. Going forward, the fund’s value-focused strategy positioning it well to continue delivering above-average dividend income.
American Century Select Fund generates growing dividend income
The American Century Select Fund (TWCIX) is a large cap fund with a focus on dividend growth. It invests in quality companies with strong competitive advantages, earnings power and the ability to consistently grow dividends. The fund has increased its dividend payout every year since 2004. The annual dividend growth rate has averaged around 9% over the past decade. Currently, the fund offers a dividend yield of 1.7%. While the yield is lower than more income-oriented funds, the Select Fund provides attractive and growing dividend income combined with a growth strategy.
American Century Mid Cap Value Fund provides high dividend yield
For investors interested in mid-sized companies, the American Century Mid Cap Value Fund (AMCVX) is worth considering. This fund invests in mid cap stocks trading below intrinsic value and pays out higher dividend yields than its benchmark index. Over the past 5 years, the fund has distributed dividend yields averaging approximately 2.5%, notably greater than the S&P MidCap 400’s 1.5% yield over the same period. The fund managers carefully select quality mid cap companies with solid financials, experienced management and dividends exceeding the market norm. The fund’s above-average dividend distributions make it appealing for income-oriented investors.
In summary, American Century’s actively managed domestic equity funds, including the Equity Income, Value, Select and Mid Cap Value funds, have consistently generated significant dividend income for investors over the long term. These funds offer dividend yields above the market averages in their respective categories along with attractive dividend growth potential. For investors seeking substantial dividend distributions, American Century’s equity funds are very competitive choices to consider.