Fund managers on the hunt for dividends find themselves wading into the shares of consumer companies that typically attract investors looking for growth instead.

One big reason for the move: traditional yield-heavy sectors like utilities and telecoms are trading at some of their highest valuations on record relative to the broad market. Fund managers see more to gain by buying companies that may offer capital gains alongside growing dividends at a time of low unemployment and an improving housing market.

Also, some consumer stocks look relatively cheap at a time when Inc and fast online shopping have been threatening to upend the retail sector.

"We've been nibbling at very high quality discretionary companies that are now cheaper because of 'Brexit' and worries about Amazon," said Ramona Persaud, a co-portfolio manager of the $7.8 billion Fidelity Equity-Income fund.

Companies that look poised to grow their dividends thanks to improving free cash flows are one standard deviation cheaper than traditional income-oriented companies measured by either price to earnings or price to book, she added.

Overall, income-oriented funds have 10.1 percent of their portfolios invested in consumer discretionary companies, up from 8.1 percent three years ago, according to fund-tracker Morningstar. Cruise line operator Carnival Corp and big box retailers Home Depot Inc and Best Buy Co Inc are among those seeing new interest from income-oriented managers.

Each company offers a yield of 3.6 percent or less, on par with the 3.8 percent yield of utility-giant Duke Energy Corp . At the same time, Duke trades at a trailing price to earnings ratio of 21.6, compared with a 15.1 P/E of Carnival, which increased its dividend by 17 percent in April. The broad S&P 500 trades at a trailing P/E of 19.6, according to Thomson Reuters data.

Scott Moore, a portfolio manager of the $37 million Buffalo Dividend Focus fund, said his fund holds Home Depot in large part as a play on the housing market that will not be hurt by online shopping.

"This is a company in the discretionary space that's not going to be disrupted by Amazon," Moore said.