ESG Dividend Income Strategy

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Overview: ESG Dividend Income is a Large Cap equity strategy investing in common stocks and ADRs. It builds on our original Dividend Income investment process with an ESG (Environmental, Social and Governance) overlay that uses an independent, well-regarded ESG ranking service (Sustainalytics), and ESG-specific research, both internal and external.

Investment Objective: Designed to be an ESG all-weather portfolio that provides good current and growing income with lower portfolio volatility than the S&P 500 Index. We strive to deliver capital appreciation over time and moderate downside protection.

Research Process: ESG and fundamental research, both quantitative and qualitative, are employed by a team of four analysts to assess the stability and growth potential of a company’s dividend-paying capability as well as the current stock price valuation, overlaid with an ESG focus.

Buy Discipline: Identify mature, successful companies with strong financial characteristics, selling at attractive valuations relative to each company’s intrinsic value that meet our ESG metrics. 90% of the stocks in the portfolio have a current yield in excess of 1.3x the S&P 500 Dividend Yield at the time of purchase.

Sell Discipline: Stocks are candidates for sale under one or more of the following conditions: the dividend is cut; the yield falls below that of the S&P 500; the outlook for future dividend growth deteriorates; the balance sheet materially weakens; the stock price rises markedly above its intrinsic value price; or the stock no longer meets our ESG criteria.

Risk Management: Monitor and assess the contribution to total portfolio risk relative to the goals of high current income, modest capital appreciation and moderate downside protection. Risk is evaluated at 5 levels – security, industry, sector, portfolio, and ESG metrics.

Strategy Fact Sheet

ESG Dividend Income
4th Quarter, 2021