Funds that still pay dividends

New York-based mutual-fund expert Lawrence Solomon says investors looking for a good dividend yield should consider three fund categories:

Growth-and-income funds. While dividend yields on these funds are promising, make sure that any G&I fund you consider has a total return in the satisfactory range, says Solomon. The average dividend yield on G&I funds is about 1.1 percent.

Utility funds. These funds carry traditional utilities including gas distributors such as Exxon Mobil Corp. But utility firms linked to telecommunications pay little in the way of dividends. The average utility fund has a dividend yield of about 2 percent.

Real-estate funds. While these funds usually come with a high dividend yield, they have been extremely turbulent in recent years and there is no guarantee that they will not hit the skids again, Solomon says.

(c) Copyright 2000. The Christian Science Publishing Society