When I look for mutual funds, I want something that does one of two things really well: either it pays me reliably with dividends, or it steadily grows my money over time. Ideally, I’d like both. But not all mutual funds live up to the hype. Some talk big in the prospectus, then barely move the needle. Others quietly work in the background, compounding returns in ways that make a real difference. After years of investing and paying close attention, I’ve put together a list of 15 mutual funds that actually pay off—some with solid dividend income, others with long-term growth potential, and a few that manage to strike a balance between both.
Table of Contents
Vanguard Dividend Growth Fund (VDIGX)
This fund doesn’t chase high yields. Instead, it focuses on companies that steadily grow their dividends year after year. That’s the kind of consistency I like.
Yield: about 2%
Expense Ratio: 0.26%
What I Like: It’s stable, doesn’t overreact to market trends, and holds quality companies with solid financials
T. Rowe Price Dividend Growth Fund (PRDGX)
This one has a slightly different strategy. It leans toward large, financially healthy firms that are growing, even if their current dividend yield isn’t sky-high. The long-term payout is in the growth of those dividends.
Yield: around 1.5%
Expense Ratio: 0.63%
Best For: Long-term income growth, not just chasing today’s yield
Fidelity Contrafund (FCNTX)
If I’m after growth, Contrafund has been a staple in a lot of portfolios for a reason. It’s heavily weighted in large-cap growth names like Apple and Amazon, and it’s managed by a veteran team that knows when to adjust.
Yield: negligible
Expense Ratio: 0.86%
Why It Works: It’s less about income and more about long-term capital appreciation
Vanguard High Dividend Yield Index Fund (VHYAX)
This fund screens for U.S. companies with higher-than-average dividends, so it’s more of a pure income play. It’s passively managed and very cheap to own.
Yield: about 3.3%
Expense Ratio: 0.08%
Why I Own It: It delivers reliable income with very little fuss
Schwab Dividend Equity Fund (SWDSX)
This one’s for conservative investors who want dividend income but don’t want to swing for the fences. It sticks to stable names and companies with long dividend histories.
Yield: around 2.5%
Expense Ratio: 0.86%
Good Fit For: People nearing retirement or who want consistent payouts
American Funds Washington Mutual Investors Fund (AWSHX)
It’s been around forever. I see this as a well-rounded dividend fund that doesn’t go overboard on risk. It sticks to U.S. companies with a history of dividend payments and solid fundamentals.
Yield: a bit over 2%
Expense Ratio: 0.57%
Why It’s Useful: It holds up better than most in down markets
Fidelity Growth Company Fund (FDGRX)
This fund is for growth-focused investors who can tolerate some volatility. It doesn’t offer dividends, but it can deliver big returns over the long haul if you stay invested.
Yield: less than 1%
Expense Ratio: 0.79%
Who It’s For: Long-term investors who don’t need income now
T. Rowe Price Blue Chip Growth Fund (TRBCX)
If I want growth with less drama, I look at this fund. It targets large, stable growth companies and has delivered consistent returns without too many wild swings.
Yield: around 0.4%
Expense Ratio: 0.68%
Bonus: It includes major players like Microsoft, Meta, and Alphabet
Vanguard Balanced Index Fund (VBIAX)
This is one of my go-to recommendations for new investors. It’s split roughly 60/40 between stocks and bonds, which helps smooth out the ride while still offering decent growth.
Yield: about 2%
Expense Ratio: 0.07%
Best Use: Core holding for a long-term portfolio
Fidelity Equity-Income Fund (FEQIX)
If you want a mix of dividend-paying stocks and some fixed income, this fund gives you a solid foundation. It’s a good balance between defensive investing and moderate upside.
Yield: 2.5%–3%
Expense Ratio: 0.59%
What Makes It Different: Strong performance in down markets
Vanguard Wellington Fund (VWELX)
This is a classic. It’s one of the oldest mutual funds still running, and for good reason. It combines stocks and bonds in a way that works well for investors who want income and growth together.
Yield: around 2.3%
Expense Ratio: 0.25%
Why I Respect It: Great for retirees and long-term planners alike
JPMorgan Equity Income Fund (OIEIX)
This is a more actively managed dividend fund. It invests in U.S. companies with above-average dividends and strong cash flows. The management team has a good track record of navigating changing markets.
Yield: about 2.5%
Expense Ratio: 0.67%
Who Should Look At It: Anyone who wants income plus upside
Invesco Growth and Income Fund (ACGIX)
It’s a value-oriented fund that holds dividend-paying stocks. I find it helpful in market cycles where growth slows and investors shift toward value.
Yield: 2.5%
Expense Ratio: 0.82%
Added Benefit: It’s defensive but doesn’t totally sacrifice growth
Vanguard Total Stock Market Index Fund (VTSAX)
This isn’t a dividend play per se, but I include it because it captures the whole U.S. market. It’s well-diversified and historically very efficient at growing capital.
Yield: around 1.5%–2%
Expense Ratio: 0.04%
When I Use It: For long-term, set-it-and-forget-it investing
T. Rowe Price Capital Appreciation Fund (PRWCX)
It flies under the radar, but this is one of the most well-balanced funds I know. It combines equities and fixed income in a way that often outperforms more aggressive strategies during market downturns.
Yield: around 1.2%
Expense Ratio: 0.70%
Why I Like It: It’s calm, steady, and better than average in most market conditions
Final Thoughts
Not all mutual funds are worth your time or money. I’ve learned that the ones that pay off usually have low fees, good management, and a clear purpose. Whether you’re trying to build income for retirement or grow your nest egg over the next 30 years, you don’t need a flashy strategy—you just need reliable execution. That’s what these funds offer. I’ve either owned them myself or seriously considered adding them to my portfolio, and I believe each one has something real to offer.
