INCOME-EQUITY STRATEGY

Income-Equity Strategy is a diversified, dividend-growth equity portfolio that seeks high current dividend income plus growth of income and principal. Stocks are primarily US based, multi-cap companies from across the broad equity market. In the portfolio, 25% can be invested in foreign stocks that trade on US exchanges (ADRs) and up to 25% can be exchange-traded Master Limited Partnerships (MLPs).

This strategy has the potential to provide “unfixed income” from stocks with high current yields and growth of cash flow from dividends. Investors seeking solid total returns that comprise both income and growth, high current income that may increase every year, potential for inflation protection, and a lower federal tax rate on qualified dividends will find this strategy attractive. Because this version of Income-Equity includes MLPs, it will generate K-1 tax reports.

Investment Philosophy

Consistent with our firm philosophy, this portfolio invests in financially strong companies with rising dividends. Our disciplined investment process focuses on compounding income — not style, sector, or asset allocation — the main driver of long-term returns. Many studies, including our own, show that dividend-paying stocks have historically outperformed non-dividend-paying stocks, and companies that increase their dividends tend to perform the best. Stock prices may fluctuate, but dividends, when paid, are always positive. And unlike bonds (with static income), equities with growth of income help protect investors from the ravages of inflation. Even a “tame” inflation rate of 2.5% can destroy almost two thirds of an investor's purchasing power over 20 years.

Investment Objective

Our investment objective is to provide high current income, growth of income, and growth of principal as conservatively as possible while investing in the equity markets. We seek to add value to our clients' overall investments by lowering volatility, raising the income level, and enhancing total return.

Composite Inception: June 1997
Portfolio Manager: MHI Investment Team

Performance and portfolio information can be obtained by contacting MHI. If you are an advisor/financial professional, you may log on to our Advisor site to obtain this information.