The first two months of 2016 have revealed a lot of volatility remaining in the stock market as investors become increasingly concerned about the global economy. That is usually a time when the investment discussion turns to dividend funds, which have also become an attractive alternative for yield seekers in this low-interest-rate environment. Dividend funds tend to perform better than growth stock funds during periods of stock market volatility, and currently, the average yield of dividend funds is higher than the average yield of S&P 500 stocks. Russel Kinnel, the director of manager research for Morningstar listed his top five picks for dividend funds investors seeking high yields with some capital appreciation. All of these funds have been awarded Morningstar’s top rating of gold or silver for overall performance and low cost.

Vanguard Dividend Growth Inv

The Vanguard Dividend Growth Inv (VDIGX), rated gold by Morningstar, is managed by Don Kilbride of Wellington Investment Management. In his 10 years as the fund’s manager, Kilbride has been very adept at finding fairly priced companies that are expected to grow their dividends by the rate of inflation plus 3%. This has resulted in a steady performance even through the roughest markets. In the last five years, the fund has doubled its assets to more than $25 billion, to become the largest single-manager fund in its category. The fund focuses on the largest of large-cap stocks, with a portfolio that includes United Parcel Service, Inc. (NYSE: UPS), The TJX Companies, Inc. (NYSE: TJX), Honeywell International, Inc. (NYSE: HON) and Colgate-Palmolive Co. (NYSE: CL). As of March 1, 2016, the fund’s 30-day SEC yield is 2.01%. Over the last 10 years, the fund has returned an impressive 8.25%, which means that a $10,000 investment 10 years ago would have grown to more than $22,000. It has returned 11.2% in the last five years.

Its 0.32% expense ratio is considered very low for its category.

T. Rowe Price Dividend Growth

Morningstar gives the T. Rowe Price Dividend Growth (PRDGX) fund a silver rating. Tom Huber has been managing the $4.5 billion fund for the last 15 years. Huber looks for companies with healthy financials that pay dividends that are expected to increase. The fund invests primarily in large-cap stocks such as General Electric Company (NYSE: GE), Danaher Corp. (NYSE: DHR), Microsoft Corp. (NASDAQ: MSFT) and Pfizer, Inc (NYSE: PFE). All pay good dividends and have solid track records of increasing them over time. As of March 1, 2016, its trailing 12-month yield is 1.74%. Its 10-year return of 7.08% ranks number eight in its category. Over the last five years, it has returned 10.12%. Its expense ratio is 0.64%, which is considered below average for its category.

Vanguard Dividend Appreciation Idx Inv

There are several Vanguard dividend funds on Kinnel’s list, because he likes the combination of strong performance and low cost. The Vanguard Dividend Appreciation Idx Inv (VDAIX) is an index fund that tracks an index of companies that have raised their dividends each of the last 10 years. Kinnel likes the fund, to which Morningstar has assigned a gold rating, because the portfolio is heavy with companies that have wide moats. As of March 1, 2016, the fund has the highest percentage of its $22.9 billion of assets under management invested in giant-cap companies like Microsoft Corp., Johnson & Johnson (NYSE: JNJ), The Coca-Cola Company (NYSE: KO) and Procter & Gamble Co. (NYSE: PG) Its trailing 12-month yield is $2.25, and its 5-year return is 9.11%.

Vanguard High Dividend Yield Index Inv

The Vanguard High Dividend Yield Index Inv (VHDYX) is a silver-rated fund that leans more towards high-yielding stocks. Although companies that pay significantly higher dividends tend to be higher risk, the fund’s managers also load it up with more stable large-cap stocks such as Microsoft Corp., Exxon Mobile Corp. (NYSE: XOM), Johnson & Johnson and General Electric Co. The strategy has worked well. As of March 1, 2016, its trailing 12-month yield is an attractive 3.23%, and its five-year return is 11.34%, which places the fund at number two in its category. Its expense ratio of 0.26% is very low for its category.

Vanguard Equity-Income Inv

The Vanguard Equity-Income Inv (VEIPX) is an actively managed fund run in part by Michael Reckmeyer of the Wellington Management Company, and in part by Vanguard’s quantitative analysis team. Utilizing the quantitative analysis enables the fund to manage for greater diversity at a lower cost. In fact, its expense ratio of 0.26% is almost as low as the index fund version, which this fund has consistently outperformed. It has $18.6 billion in assets under management (AUM), and its portfolio is tilted toward larger names such as Microsoft Corp., Wells Fargo & Co. (NYSE: WFC), JPMorgan Chase & Company (NYSE: JPM) and General Electric Co. The fund is rated silver by Morningstar, which also ranks it number four in its category for its 10-year return. Over the last 10 years, the fund returned 7.2%, and it returned 10.96% over the last five years.