How To Find a Conservative Equity Income Fund

Conservative Equity Income Funds refer to mutual funds that invest heavily in company stocks that pay high dividends.

The investor that is somewhat familiar with the way mutual funds operate, would be best served by searching for major mutual fund companies such as Fidelity, Main Street, Gabelli, Templeton, Vanguard or American. These mutual fund companies have high amounts of assets under management, as well as a large menu of Conservative Equity Income Funds to choose from.

An investor that is not familiar with mutual funds should speak with an investment advisor. The most pertinent questions to ask are: Who is the fund manager of this particular Conservative Equity Income Fund? What stocks are in this fund? What are the fees that are associated with this Conservative Equity Income Fund? The last question: What fees are associated with this fund is very important because there is a fee structure associated with all mutual funds.

The two major fee structures are titled Class A and Class B. Class A funds require the investor to pay an upfront charge that is usually 5% of the invested capital. This means that for every $1,000 you invest, $50 will be charged. Essentially, only $950 is now invested capital in the fund. The Class B structure charges what's known as a back-end load fee. When an investor invests $1,000 in a Class B fund, the invested amount will still be $1,000. In a Class B Fund the fee is taken out if and when the investor decides to remove the money from the fund. The investor must keep the money in the Mutual Fund for 5 years in order to avoid this fee. The upside to a Class B Mutual Fund is that if the investor does in fact keep his money in the Mutual Fund for 5 years, there is no fee after the 5 year date.

There are also management fees that are associated with all Conservative Equity Income Funds. These fees generally range from .30% - .50% of invested capital on a yearly basis. Knowing what fees you will be paying in a Mutual Fund is crucial when deciding which Conservative Equity Income Fund to invest in.

Conservative Equity Income Funds may also invest in different types of securities other than stocks. The term Conservative refers to ultra-safe investments and stocks are not usually considered ultra-safe. When investing in any type of Mutual Fund an investor is given a prospectus. A prospectus outlines what the mutual funds investment objectives are, the rules governing the company managing the mutual fund and an overall picture of what securities are invested in the mutual fund. Other securities include: Treasury Bonds, Government Obligated Municipal Bonds and Certificates of Deposit. These types of securities provide a very safe stream of income to the mutual fund which in turn provides income or a conservative return to the investor. The prospectus will also outline what percentage of capital will be invested in which securities at any given time.

In conclusion, talk to your investment advisor about your options in relation to Conservative Equity Income Funds because it's a free service. Even if you don't invest, just about any investment advisor will give you free advice. If you do decide to invest in a Conservative Equity Income Fund make sure to read the prospectus. It's a long and very boring read but you should always know where your money is being invested.


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