Principal Funds[see profile] has launched the Principal Small-MidCap Dividend Income Fund to bet on small- and mid-cap dividend paying companies.
"Small- and mid-sized companies, which represent 40 percent of the overall domestic market, are typically overlooked by Wall Street and may provide higher dividend yields than their large-cap counterparts," stated Dan Coleman, PM and head of equities for Edge Asset Management, a Principal Funds sub advisor. "They also offer attractive capital appreciation opportunities as these companies grow from small-cap to large-cap."
Principal Funds Launches Principal Small-MidCap Dividend Income Fund
Fund seeks to generate and grow dividend income for investors
DES MOINES, Iowa, Sep 14, 2011 (BUSINESS WIRE) -- With markets remaining volatile and fixed-income yields remaining historically low, the ability to generate both income and capital appreciation is top-of-mind for many investors.
Designed to generate and grow an income stream, Principal Funds has launched the Principal Small-MidCap Dividend Income Fund (PMDAX). The fund invests in companies that have the capacity and commitment to deliver and consistently grow dividends over time for shareholders.
"Small- and mid-sized companies, which represent 40 percent of the overall domestic market, are typically overlooked by Wall Street and may provide higher dividend yields than their large-cap counterparts," said Dan Coleman, portfolio manager and head of equities for Edge Asset Management, a Principal Funds subadvisor and wholly owned subsidiary of the Principal Financial Group(R). "They also offer attractive capital appreciation opportunities as these companies grow from small-cap to large-cap."
The fund, launched June 6, 2011, offers exposure to small- and mid-cap dividend paying companies and provides a complement to a diversified portfolio. "The dividend-paying strategies of these companies have historically offered diversification with higher income potential and better performance than large-cap companies," Coleman said.
A recent white paper from Principal Funds outlines the income and capital appreciation potential that dividend-producing stocks can provide. The paper takes a historic look at how stocks that pay dividends have outperformed non-dividend payers through both up and down markets. In fact, dividend-producing stocks in the S&P 500 outperform non-payers 66 percent of the time.(1) It concludes that dividend investing is a solid strategy because of significant market forces supporting the attractiveness of an equity income stream.
About Principal Funds Principal Funds is a leading provider of mutual funds, with $71.2 billion in assets under management.(2) Principal Funds brings expertise in global investment management, asset allocation and retirement leadership to financial professionals and investors. Including its target-risk and target-date offerings, Principal Funds is the fifth largest manager of lifecycle funds in the industry.(3) The companies that make up Principal Funds are members of the Principal Financial Group(R). For more information, visit www.principalfunds.com .
About Edge Asset Management Edge Asset Management (Edge) has been a pioneer in the field of actively managed asset allocation funds and is a leading fundamental manager delivering equity and fixed income products focused on total return and income. Edge has $20.6 billion in assets under management(4) across all its investment strategies. Based in Seattle, the firm has a heritage dating back to 1939 when it launched one of the first 50 mutual funds in the United States. Edge is an affiliate of Principal Global Investors, the asset management arm of the Principal Financial Group(R).