Growth and Income Strategies

Investment Philosophy

We believe our Growth & Income investment approach diversifies cash 􀀀flows from a variety of asset classes with the goal of preserving capital during bear markets and providing the benefits of an equity portfolio during bull markets. The identification of securities across multiple asset classes and multiple capital structures increases the investable opportunity set and assists in balancing portfolio risk with reward.

Mitigating portfolio risk and paying reasonable prices for investments are central to our philosophy. We are tax and transaction cost conscious, and strive to be opportunistic across multiple asset classes. The objectives of the strategy are capital preservation, current income with longterm capital appreciation, and creation of portfolios with lower risk compared to traditional all equity portfolios. Equities are diversified across sectors to balance risk. Most equity investments will be made in large capitalization companies with a history of growing earnings and dividends. The goal of the strategy is to have more equity exposure in securities with a dividend yield greater than the S&P 500.

We believe dividend-paying stocks are less volatile and tend to better hold their value in a declining market. A properly constructed portfolio of stocks combined with corporate fixed income securities, preferred stocks, US government securities, and cash, should mitigate risk, preserve capital and generate current income and capital growth.

Investment Process

The research and portfolio management team is comprised of individuals having industry and sector specific knowledge. Analyst-specific expertise within industries and companies, combined with an emphasis on critical thinking, collegial debate and sharing of knowledge, drives idea generation. The process is rooted in traditional fundamental security analysis. The team seeks companies with strong balance sheets, free cash 􀀀flow, generation, earnings and revenue growth, pricing power, and sustainable competitive advantage.

Investing in any asset class is valuation sensitive focusing on factors such as credit quality and outlook, price/earnings, price/book and price/free cash fl􀀀ow. Qualitative assessments are also considered and include quality of company management, health of customers, competitive forces, market opportunity, and potential regulatory impact.