This story appears in the
February 2005 issue of
Entrepreneur.
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The beauty of an equity-income fund is that it's a
two-fer--investors get the benefit of investing in a company that
not only looks promising, but also pays a dividend.
The FAM
Equity-Income Fund (FAMEX) isn't your ordinary
equity-income fund. For starters, it's a concentrated fund that
currently has about 31 stocks in its portfolio. Second, all
companies must pay a dividend, even if it's only one penny each
quarter. Finally, since the fund's inception in 1996, about 15
percent of its assets have been in cash, primarily because the
fund's managers are picky about what stocks make it into the
portfolio and are disciplined in waiting for companies to hit the
buy price. "My job is to take as much risk out of the
investment process as I possibly can," says Paul Hogan,
co-manager of the fund.
That discipline has paid off as the fund's three- and
five-year performance records are ranked No. 2 in its category,
according to Lipper. This fund is best suited for slow and steady
returns rather than slick ones. Hogan adds that this fund has
performed well in flat and sideways markets.
Dian Vujovich is an author, syndicated columnist and
publisher of fund-investing site www.fundfreebies.com.