Quotes of the Day

Want to take advantage of the lower tax rate on stock dividends but don't know what stocks to buy? Mutual-fund firms have created a batch of new funds focused on dividend-paying companies. Fund tracker Morningstar Inc. estimates that a dozen or so such funds, among them Schwab Dividend Equity Fund and Waddell & Reed Advisors Dividend Income Fund, either recently opened or are set to open. These so-called equity income funds, which pay returns to investors through both dividends and (it is hoped) share-price appreciation, have been around for years, although the investment style was eclipsed during the late 1990s mania for growth funds. Old Guard favorites: American Funds Washington Mutual Investors Fund, T. Rowe Price Equity Income and Dodge & Cox Stock Fund. Morningstar analyst Dan Culloton recommends that investors favor funds that have reasonable fees, track records and proven, experienced managers.

• Barbara Kiviat