The Dividend Income portfolio is allocated mostly in U.S. large-cap equity stocks, ETFs, and active mutual funds that pay reliable and growing dividends (aiming for 3 percent or better dividend growth above inflation) with the option to move up to 50 percent of funds to cash for drawdown risk management.
Adaptive portfolio management
Dividend Income models use an adaptive asset allocation strategy. This strategy allows the portfolio manager to invest in individual stocks for most of the portfolio, use some equity ETFs and active mutual funds to potentially increase performance and overall income, and move 50 percent of the portfolio to cash or bonds in a negative market environment. This allows the portfolio to achieve its two major goals:
- Participate in positive market returns, relative to the client’s risk tolerance
- Help protect against some principal loss during market corrections