Principal Revamps Utility Fund

The objective of the fund will continue to be the production of high current income and long-term growth of income and capital, Principal says.

Older U.S. investors once thought of investing in utilities as a way to combine safety with high dividend yields. These days, pure utility funds may have a hard time delivering that combination of safety and income, according to Jim Sager, the director of Principal’s retirement and investor services unit.

Value stocks account for about half of the Principal Equity Income Fund investment portfolio. The fund also has invested 30% of its assets in preferred securities, 15% in REITs and 5% in convertible securities, Principal says.