LOS ANGELES, March 24, 2011 /PRNewswire/ -- Against a backdrop of strong cash flows for S&P 500 companies and the consequent potential for higher dividends in the months ahead, investors looking for income may want to seriously consider investing in a high dividend strategy.
That's the view of Payden & Rygel, a leading, independent money manager, which takes a value-oriented approach to selecting companies that pay above-average dividends for its Payden Value Leaders Fund (PYVLX). According to Payden, the economic recovery and corporate cost cutting has resulted in robust profits and cash flows for many companies. S&P 500 companies currently hold more than $3 billion in cash and short-term investments on their balance sheets, pointing to rising dividend payouts and even the potential for higher equity prices.
"This is an opportune time to invest in dividend paying stocks," said Jay Wong, portfolio manager of the Payden Value Leaders Fund. "Dividend paying stocks present a double benefit to investors – yields that are better than many other traditional investments including Treasury securities and corporate bonds while offering the opportunity to participate in the equity market during a period of improving fundamentals."
Wong also said, "The fund may be attractive to fixed income investors who want to diversify their portfolios into equities, but still want or need income." The qualified dividends received by investing in the fund may also have a tax advantage over interest from bonds, depending on investors' tax status.
Payden Value Leaders Fund currently generates a yield of 5.7%, outpacing the yields on all fixed income asset classes except high yield and emerging market debt.
Wong points out that not all dividend-paying equities pay the same level of dividends. He explained that his portfolio adds value by looking beyond common stocks into equity securities like preferred stocks, REITs, business development corporations and master limited partnerships. These types of securities currently offer much higher dividend-yields than the S&P 500's 1.8% dividend yield.
For more information about the Payden Value Leaders Fund, including current performance, visit our website at payden.com. By investing in stocks, the fund exposes investors to certain risks. The value of the investment will fluctuate on a day-to-day basis with movements in the stock market, as well as in response to the activities of the individual companies whose stocks the fund owns. The Paydenfunds are distributed by Payden & Rygel Distributors, member FINRA
About Payden & Rygel
Payden & Rygel is one of the largest independently-owned global investment management firms with more than $55 billion in assets under management. Since 1983, the firm has advised corporations, foundations, endowments, pension funds, public plans and individual investors on their overall investment strategies. Payden & Rygel offers a full array of investment strategies and products, including US and global fixed-income and equity as well as absolute return strategies. Headquartered in Los Angeles, with offices in Boston, London, Dublin, Frankfurt and Beijing, Payden & Rygel is advisor to the Payden family of US-based mutual funds and to the firm's Irish-domiciled funds.
SOURCE Payden & Rygel