DNP Select Income Fund Vs. S&P 500 Index Fund


In the search for better stock performance from my own personal portfolio, I decided to research more into this income fund. The reason for my interest was due to a colleague of mine at work who recently recommended me a fund called DNP Select Income Fund (NYSE:DNP). His investment thesis into DNP was due to the fund providing monthly income at a very little cost. He liked the fund so much that he invested bi-weekly through his 401k plan. This sparked my interest in researching this fund and see if it could be a better investment than an investment in the Vanguard S&P 500 ETF (NYSEARCA:VOO).

DNP Select Income Fund

To make an assessment of the two funds, I went on Schwab website to research about DNP and VOO in more depth. According to Schwab, DNP Select Income Fund is a close-ended investment company that focuses investing in various sectors within the utilities space, while providing long-term growth of income. This fund has been around since January 1987. Below is a summary of the fund information.

Source: Charles Schwab & Co., Inc

From the Fund Profile, DNP Select Income Fund’s total holdings currently stand at 118. The top 10 holdings within this fund are made up of mostly energy companies and the top holdings take up 39.6% of the entire total assets. DNP top 10 holdings can be found in the figure below.

Source: Charles Schwab & Co., Inc

DNP is also actively managed to follow the U.S Utilities indexes. Since it is actively managed, the net expense ratio is higher than those of passively managed funds such as the Vanguard S&P 500 Index Fund ETF. The key information from DNP’s fund profile I found was the annual report net expense ratio which was 1.03%. This will be a key information to use to assess the overall performance against other funds. The second information I found from researching DNP was the performance track record for the last 10 years. Below is the fund’s overall performance growth since 2006 with a $10,000 initial investment.

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