Why We Strike a Value/Growth Balance in the Select Dividend Strategy

A Benefit of Dividend Growth: Balanced performance across market styles

Dividend growth is a good indicator of management confidence, and it is something that we emphasize in our investment process. By focusing on dividend growth, rather than just high dividend yield, we are less constrained to typical high yielding industries and can focus instead on achieving greater balance across the Value/Growth spectrum.

Indeed over the past 3.5 years, Global Select Dividend ("GSD") has exhibited strong balance, outperforming the eVestment Global Dividend and Global Core universe averages (net) during the Value Market of 2021-2022 and the Growth Market that has persisted since.

Balance at the style level has been good for long term investors

Characterizing the stock market by “Value” or “Growth” styles is a simplification, but it highlights the cumulative benefit of building a portfolio with balance across the style spectrum.

Having that balance helped GSD outperform the Dividend and Core averages by > 15% cumulative over the 3.5-year period.

Past performance does not guarantee future results.  Investing in securities involves risk, including the possibility of the loss of principal.

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Certain accounts in the composite pay a "wrap fee" based on a percentage of assets under management. As such, gross performance is pure gross, does not reflect the deduction of transactions costs, and is presented as supplemental information only. Net performance results are reduced by all fees charged, including the actual wrap fee. Unless otherwise stated, performance greater than one year is annualized. Actual client portfolio results may differ on, among other things, an account’s particular investment objectives and restrictions, asset levels, and timing of contributions and withdrawals.

Advisory Research is providing this material for informational purposes only.  The information provided is not intended to recommend any company or investment described herein, and is not an offer or sale of any security or investment product or investment advice.  Before making any investment decision, you should seek expert, professional advice and obtain information regarding the legal, fiscal, regulatory and foreign currency requirements for any investment according to the laws of your home country or place of residence.

Certain information contained herein constitutes forward looking statements, projections and statements of opinion (including statements of financial market trends). Such information can typically be identified by the use of terminology such as “may”, “will”, “should”, “expect”, “anticipate”, “project”, “estimate”, “intend”, “continue” or “believe” or comparable terminology. All projections, opinions and forward looking statements are based on information available to Advisory Research as of the date of this presentation, and Advisory Research’s current views and opinions, all of which are subject to change without notice. Due to various risks and uncertainties, actual events or results may differ materially from those reflected or contemplated in forward looking statements. Additionally, information and views presented herein may be drawn from third-party or public sources which are believed, but not guaranteed, to be reliable and which have not been verified for accuracy or completeness.

Advisory Research’s strategies are actively managed and not intended to replicate the performance of any cited index:  the performance and volatility of Advisory Research’s investment strategies may differ materially from the performance and volatility of a cited index, and their holdings will differ significantly from the securities that comprise the index.  You cannot invest directly in an index, which does not take into account trading commissions and costs. 

Benchmark comparison is presented using the iShares MSCI ACWI ETF as Advisory Research considers this ETF to parallel both associated risk and the investment style presented by the strategy.

The iShares MSCI ACWI ETF seeks to track the investment results of an index composed of large and mid-capitalization developed and emerging market equities.

Advisory Research is an investment adviser in Chicago, IL. Advisory Research is registered with the Securities and Exchange Commission (SEC).  Registration of an investment adviser does not imply any specific level of skill or training and does not constitute an endorsement of the firm by the Commission. Advisory Research only transacts business in states in which it is properly registered or is excluded or exempted from registration.  A copy of Advisory Research’s current written disclosure brochure filed with the SEC which discusses among other things, Advisory Research’s business practices, services and fees, is available through the SEC’s website at: www.adviserinfo.sec.gov