Retire wealthy: My 3 top dividend funds for 2019

Chart showing an upwards trend
Chart showing an upwards trend

This time of year – when things are a bit quieter after Christmas – can be a great time to get your finances sorted. It’s the perfect time to check your investments, make a few adjustments, and plan for the years ahead.

Today, I’m looking at a selection of top dividend-focused funds that could be worth a few minutes of your research time heading into 2019. All three have a focus on large, well-known companies, and pay investors large dividends.

JO Hambro UK Equity Income

If you like keeping things simple, take a look at the JO Hambro UK Equity Income fund. This is a classic UK-focused ‘equity income’ fund designed to provide both capital growth and income, and comes with a significant allocation to FTSE 100 stocks. It’s available on the Hargreaves Lansdown platform with a fee of just 0.67% per year, and its yield is around 5%.

While the fund’s performance has been a little soft in the last six months due to its exposure to energy and banking stocks (the top four holdings are currently Shell, BP, HSBC and Lloyds), over three years its performance has been solid. Overall, the fund has delivered strong outperformance relative to the FTSE All Share Index since its launch. As such, I think it could make an excellent core holding fund for those seeking large-cap dividends.

Morgan Stanley Global Brands Equity Income

If you’re keen to diversify globally (which is probably a sensible idea with Brexit), check out the Morgan Stanley Global Brands Equity Income fund. Its goal is to provide attractive levels of income and capital appreciation by investing in high-quality businesses that have powerful brands.

This fund doesn’t have a long-term track record as it only launched in 2016. However, it’s been a strong performer in the last year (while markets have tumbled), and I think it has the potential to keep delivering, given its quality-investing approach.

Looking at the portfolio holdings, there are some fantastic names in this fund. For example, the top five holdings are Reckitt Benckiser, Microsoft, Twenty-First Century Fox, Unilever and Visa. These are all businesses that have been around for a long time, and have a history of generating strong returns for shareholders.

This fund isn’t the cheapest around, given its annual fee of 1%, yet with a yield of nearly 4% on offer, as well as exposure to some of the world’s most powerful companies, I wouldn’t let that be a deal breaker.

Franklin UK Rising Dividends

Lastly, another dividend fund that could be worth a look in 2019 is the Franklin UK Rising Dividends fund. With interest rates around the world rising, this fund could offer protection, as it has a specific focus on companies that are increasing their dividends.

The aim of this fund to provide investors with a growing level of income, along with some capital growth, in order to provide a total return that is greater than that of the FTSE All-Share Index over the medium-to-long term. Currently, the fund offers a yield of around 3.4%, and its top five holdings are Shell, Unilever, Diageo, Imperial Brands and AstraZeneca. Due to its focus on high-quality dividend growth stocks, the performance of the fund has been very respectable in recent years.

With a fee of just 0.55% through Hargreaves Lansdown, I think this fund is an excellent choice for dividend investors.

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Edward Sheldon owns shares in Royal Dutch Shell, Unilever, Imperial Brands, Diageo, and Lloyds Banking Group and also has a position in the JO Hambro Equity Income fund. Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool's board of directors. The Motley Fool UK owns shares of and has recommended Unilever. The Motley Fool UK owns shares of Microsoft and Visa. The Motley Fool UK has recommended AstraZeneca, Diageo, HSBC Holdings, Imperial Brands, and Lloyds Banking Group. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.