Dow Jones Select Dividend Index Fund

If you are looking for an easy way to own a diversified portfolio of large companies that pay reliable dividends, the Dow Jones Select Dividend Index Fund (DVY) may be just for you. It's an exchange-traded fund offered by Barclays that tracks the Dow Jones Select Dividend Index, which contains the 50 U.S. stocks with the highest dividend yields.

You can buy the fund, which is traded on the New York Stock Exchange - symbol DVY, directly through your broker. Stocks in the index also must have had five consecutive years of increasing dividends, a five-year average payout ratio (dividend/earnings) of 60 percent or less and an average daily trading volume of 1.5 million shares or more.

Some of the stocks in the fund are: Altria (MO), AT&T (T), Bank of America (BAC), General Motors (GM), Citigroup (C), Regions Financial (RF), Merck (MRK) and Washington Mutual (WM). The dividend yield of the fund is usually greater than yield on the S&P 500. And its annual expense ratio is low.

This fund is an excellent choice for the long-term buy-and-hold investor who wants growth and income and may want to reinvest dividends.

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Updated September 29, 2007.