PRINCIPAL STREET EQUITY INCOME STRATEGY

The Principal Street Partners Equity Income Strategy (“PSP EI”) is a domestic, large-cap, dividend-focused equity strategy.

Derived from a repeatable, disciplined investment process, the strategy is designed to identify companies with attractive balance sheets and a heritage of paying above-market dividends coupled with dividend growth.

Principal Street’s proprietary research demonstrates companies fitting this profile can provide superior absolute and relative risk-adjusted performance compared to non-dividend payers over the longer term. Since 2008, the strategy’s average historical dividend yield is 1.9x that of the S&P 500 and the dividend payout has grown at over 10% per annum since inception.

Investment Objective

Construct a portfolio of blue chip U.S. companies with the following attributes:

High-quality and liquid balance-sheets

Durable cash flows supported by
attractive relative cash flow margins
Attractive and growing dividends
Attractive relative valuations

Proprietary Process

Proprietary thirteen-factor model
Systematic, intuitive and repeatable
investment process

Rebalanced and reconstituted quarterly
or as needed

Annual turnover since 2011 ~ 36%

Differentiated Strategy

40 equal-weighted holdings across ten sectors with four positions in each sector

Real estate sector excluded due to
mandated REIT distributions and non-
qualified dividend tax treatment

Equal-weighted portfolio provides
greater industry diversification
and migrates allocating capital to
overbought sectors

Learn more about Principal Street Partners