Contempt for overpriced mutual funds may be keeping DIY investors from a surprisingly effective way to hold dividend stocks.
Exchange-traded funds holding dividend stocks have been a hugely popular choice for people who prefer to buy a diversified portfolio rather than build one stock by stock. This is a great trend – ETFs are a cheap and efficient way to get into dividend stocks.
But there's another option worth considering. It's the D-series mutual fund, which is designed for the do-it-yourself investor. Fees for these funds are much lower than traditional funds because there's only a sliver of the usual compensation paid to dealers or advisers.
Only a small number of fund companies offer D-series funds, but there's still a fine selection in the Canadian dividend category. In fact, active managers employed by fund companies do some of their best work running Canadian dividend funds. Returns, even with higher fees, are competitive with dividend ETFs.
To help you choose between Canadian dividend ETFs and D-series Canadian dividend and income mutual funds, we present The Great Canadian Dividend Fund Smackdown. Find a winner that works for your investing needs.