Overview
The Dividend Strategy Portfolios invest primarily in dividend-paying stocks that offer the potential for income growth and capital appreciation over time. The investment team believes that companies that exhibit market leadership, coupled with solid balance sheets and strong dividend profiles, are attractive investment candidates for the long-term investor.
Investment Objective
The strategy seeks to achieve:
- Dividend income 1
- Growth of dividend income
- Long-term capital appreciation
- target dividend yield that exceeds the S&P 500 Index 2
Investment Philosophy
We believe that:
- A total return portfolio—with exposure to companies that either pay an existing dividend or have the potential to pay and/or significantly grow their dividends—has the potential to outperform over the long term
- Consistent and competitive risk-adjusted returns may be achieved by investing in select large- and mid-cap companies and by seeking to limit portfolio turnover to capitalize on potential for long-term growth
Key Differentiators
- Typically exhibits low portfolio turnover 3 to allow for benefit from compounding effects of dividends over time
Portfolio Positioning
- Designed to meet long-term financial goals:
- Income generated from these portfolios may rise over time as companies continue to raise their dividends
- The compounding effect of any dividend increase may become more pronounced as time passes
- The growth in dividends underscores the inflation protection characteristics of the strategy
Investment Process
We seek to:
Define the investment universe
- emphasize domestic large-capitalization stocks, but also consider mid- and small-capitalization companies and ADRs of foreign companies opportunistically;
Evaluate stocks using proprietary discipline
- screen for companies across all market sectors with either an attractive dividend yield or a history of (or prospects for) dividend growth, and strong balance sheets, dominant positions and/or reasonable valuations;
Select securities and construct portfolio
- conduct fundamental research and dividend analysis to identify companies with attractive growth characteristics relative to their valuation levels; and
Review process
- re-examine a current holding when valuation is realized, fundamentals deteriorate, and/or cyclical shifts alter industry's attractiveness.
Investment Risks
All investments involve risk, including loss of principal and there is no guarantee that investment objectives will be met.
Investments may be made in small- and mid-cap companies, which involve a higher degree of risk and volatility than investments in large-cap
companies.
Investments may also be made in ADRs and other securities of non-U.S. companies in developed and emerging markets which involve risks in
addition to those ordinarily associated with investing in domestic securities, including the potentially negative effects of currency fluctuation, political
and economic developments, foreign taxation and differences in auditing and other financial standards. These risks are magnified in emerging
markets.
Limited investments also may be made in non-dividend paying stocks that are not expected to pay a dividend in the near future. The manager may
hold significant portions of portfolio assets in cash equivalents while waiting for buying opportunities.
Management Team
Established in 2005, ClearBridge Advisors has over 45 years of asset management experience. The firm is known for its research-driven, fundamental approach to investing, offering actively managed U.S. equity products in a wide range of capitalizations and styles.
Investment Management
Harry "Hersh" Cohen
Managing Director
- Chief Investment Officer
- Senior Portfolio Manager
- 43 years of investment industry experience
Peter Vanderlee, CFA
Managing Director
- Portfolio Manager
- 13 years of investment industry experience
Michael Clarfeld, CFA
Managing Director
- Portfolio Manager
- 12 years of investment industry experience
Diane Keady
Director
- Portfolio Manager
- 12 years of investment industry experience