The multiple benefits of dividends

Typically, mature, profitable companies reward their investors by paying dividends.

Is your portfolio positioned to benefit from dividend-paying stocks?

Dividends may help investors:

Mitigate market declines. Dividend-paying stocks could amplify equity returns if an economic recovery gains momentum. If conditions falter, the income that dividends generate may help offset the impact of a market decline.

Focus on quality companies. Companies that pay consistent dividends typically focus on long-term results and sustainable earnings, seeking to generate stable income streams along the way.

Increase portfolio returns. Without the additional returns provided by reinvested dividends, portfolio performance can be notably weaker.

As the chart below indicates, dividend payouts have accounted for an important part of the S&P 500® Index’s total return, as represented by the S&P Dividend Aristocrats Index, for the 10-year period ended 2011.

Dividends effect on stock market return

Source: Morningstar, April 2012, most recent data available.

The performance quoted represents past performance and does not guarantee future results.

Your financial advisor can help you decide if a dividend-paying allocation is appropriate for your portfolio in light of your goals, time horizon, and attitude toward risk.

Carefully consider the Fund’s investment objectives, risk factors, charges, and expenses before investing. This and other information can be found in the Fund’s prospectus and its summary prospectus, which may be obtained by visiting or calling 800 523-1918. Investors should read the prospectus and the summary prospectus carefully before investing.


Investing involves risk, including the possible loss of principal.

The S&P 500® Dividend Aristocrats® Index measures the performance of S&P 500 companies that have increased dividends every year for the last 25 consecutive years. The index treats each constituent as a distinct investment opportunity without regard to its size by equally weighting each company.

S&P 500® Index measures the performance of 500 mostly large-cap stocks weighted by market value, and is often used to represent performance of the US stock market. An index is unmanaged and one cannot invest directly in an index.

Indices are unmanaged, and one cannot invest directly in an index.