High 50 Dividend

Current as of September 30, 2017

Strategy DescriptionBenchmark: S&P 500 IndexEquity Exposure: Mid and Large-Cap Value

The objective of this strategic discipline is above average total return. The strategy seeks to invest in common stocks of 50 U.S.-headquartered companies selected by applying a specialized dividend-oriented strategy. The 12-month strategy selects five high-yielding stocks from each of the Global Industry Classification Standards (GICS®) sectors, with the financials and real estate sectors combined. Factors considered in portfolio composition include, but are not limited to, market cap minimums, payout ratios and earnings and revenue trends and the strategy also looks to employ industry diversification. An appropriate benchmark for this strategy would be the S&P 500 Total Return Index.

Quantitative, strategic discipline. Predetermined methodical process.

As of 9/30/2017

Portfolio Characteristics*

  AAM Portfolio S&P 500 Index
Price/Earnings Ratio*** 20.50% 22.20%
Price/Book Ratio*** 2.30 3.00
Price/Sales Ratio*** 1.50 2.20
No. of Holdings 59 500
Alpha** -0.91 0.00
Beta** 0.88 1.00
R Squared** 0.84 1.00
Sharpe Ratio** 1.22 1.46
Tracking Error** 3.84 0.00
Information Ratio** -0.63 0.00
Standard Deviation** 9.20 9.55

*Supplemental information only

Source: **Morningstar (5-year data for risk calculations)

Source: ***FactSet Research Systems Inc.



Composite Asset Allocations

Actual weightings may vary per asset class. Rounding calculations may cause percentages to not sum to 100.

Composite Performance

Period (Pd) Composite (Gross of Fees) Composite (Net of Fees) Benchmark
Return
S&P 500
**
Composite 3 Yr St Dev
**
Benchmark 3 Yr St Dev
No. of Portfolios Composite Dispersion Total Composite Assets (millions) Total Firm Assets (millions)
2007* -4.65% -4.89% -4.60% N/A N/A <=5 NM $0.1 $173.1
2008 -39.26% -39.65% -37.00% N/A N/A <=5 NM $0.8 $199.3
2009 45.83% 44.68% 26.46% N/A N/A 12 4.99 $3.5 $261.9
2010 14.97% 14.14% 15.06% N/A N/A 17 2.95 $6.2 $363.9
2011 5.98% 5.27% 2.11% 20.09 18.71 27 1.44 $9.5 $385.5
2012 10.93% 10.15% 16.00% 13.14 15.09 44 0.93 $15.7 $451.2
2013 26.07% 25.23% 32.39% 10.19 11.94 55 0.92 $22.0 $491.1
2014 13.78 13.06 13.69 8.29 8.97 62 0.61 $26.8 $494.0
2015 -5.99 -6.60 1.38 10.15 10.47 57 0.55 $22.8 $798.0
2016 18.33 17.58 11.96 10.22 10.59 61 0.86 $22.3 $1,131.3

Results shown in US $. Gross returns on Fee Based Composites are stated gross of the AAM management fee and net of transaction costs. Net returns on Fee Based Composites include the deduction of transaction costs and the AAM management fee. The fees charged by AAM are described in its Form ADV Part 2A. It is not possible to invest directly in an index.

Benchmark is the S&P 500 Total Return Index – The S&P 500 Total Return Index is a commonly used gauge of the U.S. equities market and includes 500 leading companies in leading industries in the U.S. economy. The index focuses on the large cap segment of the market, with approximately 75% coverage of U.S. equities.

* Partial period return from 10/1/2007 to 12/31/2007

** N/A = 36 monthly returns are not available for this composite for period of time specified and are not required to be presented for years prior to 2011.

The 2011 3 year annualized standard deviations for the composite and the benchmark were changed from 22.22 and 20.37 to 20.09 and 18.71 due to an error.

NOTE: The Composite Dispersion column reflects information based on accounts that were in the composite for the duration of the year. AAM Internal Dispersion utilizes the asset-weighted standard deviation of the individual composite component full-period portfolios around the composite weighted mean return. Composites containing 5 portfolios or less show <=5 and NM, as not meaningful.

Advisors Asset Management Inc. (AAM) claims compliance with the Global Investment Performance Standards (GIPS®) and has prepared and presented this report in compliance with the GIPS® standards. Advisors Asset Management Inc. has been independently verified from July 1, 2003 through Q4-2015. The verification report(s) is/are available upon request.

Verification assesses whether (1) the firm has complied with all the composite construction requirements of the GIPS standards on a firm-wide basis and (2) the firm’s policies and procedures are designed to calculate and present performance in compliance with the GIPS standards. Verification does not ensure the accuracy of any specific composite presentation.

Advisors Asset Management, Inc. is a registered broker/dealer, member FINRA and SIPC and SEC registered investment adviser.  AAM also sponsors unit investment trusts (UITs), which are excluded from the GIPS definition of the firm. To obtain a presentation that complies with the requirements of GIPS and/or a list and description of all firm composites, contact your financial professional. You may also obtain this information by emailing SMAadministration@aamlive.com.

This report is for informational purposes only and subject to change. All content has been obtained from sources believed reliable; however, we do not guarantee its accuracy or completeness. Each account will be managed on an individual basis and will have variations. Investment return and principal value will fluctuate and there can be no assurance that the portfolio’s objective will be achieved. Past performance does not guarantee comparable future results. Actual returns may be lower. Common stocks are subject to a variety of risks, including economic recession and the possible deterioration of either the financial condition of the issuers of the securities or the general condition of the stock market. Composite returns assume the reinvestment of dividends, capital gains, and other earnings.

The indices shown are not managed portfolios and are not subject to advisory fees or trading costs. Investors cannot invest directly in the indices. Adviser is aware of the benchmark comparison guidelines set forward in the SEC Clover No-Action Letter (1986) and compares clients’ performance results to a benchmark or a combination of benchmarks most closely resembling clients’ actual portfolio holdings. However, investors should be aware that the referenced benchmark funds may have a different composition, volatility, risk, investment philosophy, holding times, and/or other investment-related factors that may affect the benchmark funds’ ultimate performance results. Therefore, an investor’s individual results may vary significantly from the benchmark’s performance.

AAM High 50 Dividend Composite - The objective of this strategic discipline is above average total return. The strategy seeks to invest in common stocks of 50 U.S.-headquartered companies selected by applying a specialized dividend-oriented strategy. The 12-month strategy selects five high-yielding stocks from each of the Global Industry Classification Standards (GICS®) sectors, with the financials and real estate sectors combined. Factors considered in portfolio composition include, but are not limited to, market cap minimums, payout ratios and earnings and revenue trends and the strategy also looks to employ industry diversification. An appropriate benchmark for this composite would be the S&P 500 Total Return Index.

Fixed Income Portfolios smaller than $75,000 minimum and Equity Portfolios less than $25,000 minimum are not included in composites. Prior to May 21, 2014 Fixed Income Portfolios smaller than $200,000 minimum were not included in composites and Equity Portfolios less than $100,000 minimum were not included in composites (except for accounts opened prior to April 2008). 

The firm believes that all significant events that would help a prospective client interpret the performance record are contained within the composite disclosures as well as the firm’s SEC Form ADV Part 2a.

Composites are valued on the last business day of the month for all periods presented. Policies for valuing portfolios, calculating performance, and preparing compliant presentations are available upon request.

Composite creation date for the AAM managed High 50 Dividend Composite is October 2007.

The AAM fee range for the High 50 Dividend strategy is 0.25 to 1.65 bps. There may be some accounts with fees negotiated outside this range depending on the overall relationship with the client.

The bundled fee includes custodial fees and services and other brokerage fees associated with the individual accounts.

Specific securities identified and described do not represent all of the securities purchased, sold, or recommended for advisory clients and the reader should not assume that investments in the securities identified and discussed were or will be profitable.