Dividend Funds Put Money in Your Pocket

Like nearly all equity funds, Thornburg Investment Income Builder(TIBAX Quote) has suffered lately. But many Thornburg shareholders have little cause to be upset because they withdraw dividends from the fund, receiving monthly checks. And in the past year, the checks have increased 11%.

Thornburg's reliability is particularly noteworthy because dozens of companies have cut dividends in recent months. Portfolio manager Brian McMahon has dodged most of the trouble, sticking with solid shares that have continued to increase their dividends.

By picking steady stocks, McMahon has maintained his record for constantly raising dividends. In 2003, the fund paid annual dividends of $0.56 and had a share price of $11.94. Since then, the dividend has increased every year. Now the share price is $13.90, and Thornburg expects to distribute more than $1.00 in dividends for 2008. "Even in the worst market conditions, many companies continue raising dividends," says McMahon. ...