The DNP Select Income Fund (DNP) is a diversified low risk, income producing mutual fund that’s primary goal is to generate income such as dividends and bond payments for its investors. The DNP Income Fund has been in existence since the late 1980’s and is headquartered in Chicago, Illinois. The fund invests in Moody’s rated bonds between BB and AAA and a number of both U.S. and International utility companies. This review will discuss the DNP Select Income Fund in terms of its management and key performance metrics.
DNP Fund management
The DNP Select Income Fund is managed by the funds Chairman and Chief Executive Officer name Francis E. Jeffries, and Nathan A. Partain respectively and as of the date of this review. Both of these fund managers are Chartered Financial Accountants and assisted by a Board of Directors and other key professional management executives. A complete profile of the DNP Income Fund’s management is available within its U.S. Securities and Exchange Commission filings, particularly the annual report form N-CSR.
Performance metrics
• Risk: This mutual fund is low risk because it usually invests heavily in a range of low risk corporate and government financial instruments such as shares of utilities companies and/or high dividend paying stocks of highly capitalized companies.
• Yield: Since capital appreciation is a secondary objective of this fund, stock price has not followed a growth pattern but income yield is quite fair at an annual amount of .78 cents per shares ranging between 7.1-10.9% of share value at prices between $7.30-$11.00. The monthly distribution per share is fixed by the fund’s management at 6.5 cents per share.
• Income: As of the date of this article the fund was yielding .78 cents per share, and at the maximum price the fund has reached per share this would be approximately 7.1% distributed quarterly.
• Size: The fund has 231.58 million shares outstanding and a market capitalization/worth $1.69 billion dollars (yahoo finance)
• Sector(s): The primary areas in which this mutual fund invests are utilities, specifically electric and gas at 58% of the fund’s value and communications at 26% of the fund’s value. (dnpselectincome.com)
• Structure: The DNP Select Income fund is closed-end except in the case of series C preferred shareholders. Moreover, DNP common shares are non-redeemable from the fund manager; consequently the structure of the mutual fund allows more fixed investments.
• Diversification: This fund contained no more than %5 of its investments in any one company either domestic or international at the time of this documentation. This indicates a strong diversification of invested funds within a less diversified number of sectors.
Summary
The DNP Select Income fund has held up well in a time of economic recession with no interruptions to its monthly income distribution. This indicates sound investments and ample solvency for the fund to both continue its operations and income objectives. In terms of individual portfolio investing, this fund may be good for highly capitalized and/or late stage retirement planning or thereafter due to its lower capital appreciation and steady income at a moderate to good yield higher than money market accounts and most certificates of deposit. The fund has been active for over 2 decades, has a dividend reinvestment program (DRIP) and has a proven performance track record.
Sources:
1. http://www.dnpselectincome.com/index.html
2. http://www.finance.yahoo.com
3. http://www.sec.gov