|Conviction portfolio||S&P500 Index SPY ETF||Difference|
|YTD 9.37 %||4.85 %||4.52 %|
|Year||Conviction Portfolio||S&P500 Index SPY ETF||Difference|
|CAGR||3 years (ann.) 22.39%||3 years (ann.) 12.54%||9.85%|
|CAGR||5 years (ann.) 22.56%||5 years (ann.) 14.35%||8.21%|
|CAGR||7 years (ann.) 16.71%||7 years (ann.) 10.06%||6.65%|
Our Conviction Portfolio holds usually between 15 to 50 stocks (incl. ETFs). SR = Sharp Ratio
Performance shown net of fees in USD. Past performance is not indicative of future performance.
The Key Benefits of the Strategy (net long only)
• Seeks alpha-generation within the mid and large-cap equity allocation of your portfolio
• Allows investors to participate in stocks of high quality with a solid and stustainable growth outlook
• Offers access to an active but prudent, flexibel and global investment approach, investing also in ETFs
• Equal-weighted approach seeks diversification within the strategy, sectors and regions
The Conviction Strategy can use prudent option strategies in order to enhance income like writing covered calls and puts on some selected equity positions and/or use a tactical overlay hedge with index futures. FX hedging is also possible. The portfolio can also hold alternative ETFs and/or exposure to Gold, Real Estate, Bonds or Cash.
The objective of the Fund is to achieve increasing annual distributions together with long-term capital growth from investing predominantly in global securities.
Prudency is the starting point for our strategy.
We do not track indices closely. Instead of focusing on relative risk, we
look at absolute risk, while the whole finance industry is concentrating on benchmarks.
And closely following a benchmark isn’t necessarily in clients’ interests. For both individual and institutional investors, preservation of capital is more important.
For institutional investors, such as pension funds, our focus on lower risk is
also attractive because it can help stabilize funding ratios.
So prudency isn’t just part of the strategy, it’s also part of our investment philosophy.
Active investment management is about blending your portfolio with low-volatility strategies and the inclusion of value and momentum factors, which has proven very effective over the past years.
Within the large cap backet (segment) we will try to blend that weighting with the best Dividend Stocks.
Blue chip dividend stocks can be great investments, especially for investors living off dividends in retirement. However, purchasing stocks simply because they are a dividend aristocrat or part of the Dow Jones is an unnecessarily risky activity. Data shows that the average lifespan of an S&P 500 company has dropped from 61 years in 1958 to less than 20 years more recently. Companies that were once dominant giants are more vulnerable to change than ever before. Run each of your ideas through our blue chip checklist and conduct additional research to give yourself the best chance of investing in dividend stocks that will not only survive the next storm but emerge with higher dividend payments and more cash flow coming in the door.
Dividend Backet (Portfolio) Objective
The Top 20 Dividend Stocks portfolio seeks to outperform the S&P 500 by at least 1% per year over any five-year rolling time horizon while generating safe, growing dividend income every year.
We expect the portfolio to underperform in bull markets and outperform in bear markets due to the higher quality level of its holdings.
Total return is expected to be composed of:
We invest in high quality companies with enduring competitive advantages, long operating histories, shareholder-aligned management, and large markets that provide opportunity for long-term growth. These businesses maintain reasonable payout ratios, generate consistent free cash flow, and have healthy balance sheets, providing a sturdy foundation for consistent dividend increases.
When we make an investment, we take a patient, long term investment horizon and expect to hold the stock for at least five years, keeping portfolio turnover low. Generally speaking, we will only sell a stock if the safety of the dividend payment has come into question, the company’s long term earnings power appears to have become impaired, the stock’s valuation reaches seemingly excessive levels, or we find a more attractive idea.