3

I am trying to understand the difference between Value, Blend, and Growth.

I want to receive dividend and Growth. Do I need to look for funds with high Distribution Yield? or high Annual return? and the Distribution Yield Percentage is that annual figure?

  • Note that while some things will be similar across multiple companies, what a particular mutual fund means by "Value", "Blend", or "Growth" will depend on how that company interprets those terms. – Grade 'Eh' Bacon Jul 21 '17 at 14:17
3

There are two independent sets of terms we need to define in order to answer your question.

I am trying to understand the difference between Value, Blend, and Growth

These are different categories of mutual funds:

  1. Value: discounted or undervalued stocks. This is often measured by a difference between the stock's price and the Net Asset Value (NEV).

  2. Growth: stocks that fund managers believe are poised for significant growth (increase in stock price and NEV).

  3. Blend: a blend of two categories of stocks. In this context it probably refers to a combination of growth and value stocks, but it just depends on the context.

I want to receive dividend and Growth

These are ways to receive earnings from a stock or fund.

  1. Dividend: a direct cash payment from owning a stock or a fund. Stocks and funds who pay out 100% of their profits don't have any money leftover to grow themselves and either stagnate or shrink.

  2. Growth: an increase manifesting itself in capital gains. If a stock or fund pays out zero dividends, then all profits are invested back into the company for fund, increasing its value.

If you intend to automatically reinvest dividends, then receiving dividends is essentially the same as receiving profit through capital gains. If you intend to sell stocks or funds periodically to get some extra spending cash, then receiving profits through capital gains is essentially the same as dividends.

1

Generally value funds (particularly large value funds) will be the ones to pay dividends. You don't specifically need a High Dividend Yield fund in order to get a fund that pays dividends. Site likes vanguards can show you the dividends paid for mutual funds in the past to get an idea of what a fund would pay.

Growth funds on the other hand don't generally pay dividends (or at least that's not their purpose). Instead, the company grows and become worth more. You earn money here because the company (or fund) you invested in is now worth more.

If you're saying you want a fund that pays dividends but is also a growth fund I'm sure there are some funds like that out there, you just have to look around

0

Funds built of dividend-paying stocks are normally called income funds.

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service, privacy policy and cookie policy

Not the answer you're looking for? Browse other questions tagged or ask your own question.