Dividend Focused Equity Portfolio

Transcription

1 March 2014 Dividend Focused Equity Portfolio Christopher Eckert Portfolio Management Director Senior Vice President/Financial Advisor 320 Post Road West Westport, CT PHONE: TOLL-FREE: FAX: Inside Introduction to the Dividend Focused Equity Portfolio... Page 2 Dividend Focused Equity Portfolio... Page 3 Dividend Focused Balanced Portfolio... Page 5 Investments and services offered through Morgan Stanley Smith Barney LLC, member SIPC.

2 Dividend Focused Equity Portfolio Investment Strategy The portfolio invests in domestic and international companies companies with sustainable earnings, quality management and attractive valuations that not only pay attractive dividends but companies that have the willingness and the ability to increase their dividends. Investment Objective The portfolio s primary investment objectives are to provide a current level of income which exceeds the average on U.S. stocks generally, to provide a growing stream of income and long-term growth of capital. Distinguishing Characteristics Companies under consideration for the portfolio often have strong balance sheets, a sustainable, predictable and understandable business model, high quality products, leading market share and shareholder friendly management. Eligible Universe U.S. common stocks, foreign stocks, convertible stocks, preferred stocks, open-end mutual funds, closed-end mutual funds and exchange-traded funds (ETFs). What is a Dividend? A distribution of a portion of a company's earnings, decided by the board of directors, to a class of its shareholders. Companies can increase, decrease or totally eliminate their dividends without notice. Benefits of Investing in Dividend Paying Stocks Dividends have historically have been a major component of total return for stocks. Dividend-paying equities provide income which has the potential to grow over time. Dividends provide a measure of value not subject to manipulation by corporate management; earnings are subject to the vagaries of accounting but dividends are tangible. Historically, companies which pay dividends have been shown to grow their earnings at rates faster than companies which do not, and total returns have been higher for dividend-paying equities (Financial Analysts Journal, September 2005). Dividends can provide a cushion in bear markets, and reinvesting dividends can accelerate returns when markets rebound. Dividend Focused Balanced Portfolio Will generally have an allocation of 65% to dividend paying common stocks and 35% to fixed income investments. What is the Portfolio Management Program? All portfolios are managed individually on a fully discretionary basis by Financial Advisors at Morgan Stanley who have been qualified by the firm to independently manage client assets based on training, experience and commitment to service. MORGAN STANLEY 2

3 Dividend Focused Equity Portfolio all prices and yields as of 03/10/14 Investment Sector & Price Dividend YTD 52 Week Price Current Security Name Industry Subsector Symbol 3/10/2014 Yield % Return % Return Target Allocation Cash 7.0% Money Market 7.0% Equity 93.0% Broad Equity Market SPDR Diamonds Trust Mega Cap ETF DIA $ % SPDR S&P Dividend Large Cap ETF SDY $ % Consumer Discretionary Home Depot Home Improvement HD $ % 0% 16% $ % Starbucks Restaurants SBUX $ % -7% 25% $ % VF Corp Apparel VFC $ % -2% 51% $ % Consumer Staples CVS Drug Stores CVS $ % 3% 41% $ % Mondelez International Packaged Foods MDLZ $ % -1% 23% $ % Pepsico Beverages PEP $ % -2% 6% $ % Philip Morris International Tobacco PM $ % -8% -12% $ % Energy Chevron Integrated Oil & Gas CVX $ % -8% -3% $ % ENSCO International Oil & Gas Drilling - Offshore ESV $ % -9% -10% $ % Marathon Petroleum Refining & Marketing MPC $ % -2% 1% $ % National Oilw ell Varco Oilfield Equipment & Services NOV $ % -1% 16% $ % Williams Cos Oil & Gas Storage & Transportation WMB $ % 11% 23% $ % Financials Starw ood Property Trust REIT - Mortgage STWD $ % 8% 8% $ % Starw ood Waypoint Residential Trust REIT - Mortgage SWAY $ % 0.7% Healthcare Abbott Labs Medical Equipment ABT $ % 3% 14% $ % AbbVie Pharmaceuticals ABBV $ % -3% 38% $ % Johnson & Johnson Pharmaceuticals JNJ $ % 2% 19% $ % UnitedHealth Group Managed Care UNH $ % 3% 44% $ % Industrials General Electric Multi-Industry GE $ % -7% 10% $ % United Technologies Multi-Industry UTX $ % 4% 29% $ % Source of prices and yields: Thomson Reuters MORGAN STANLEY 3

4 Dividend Focused Equity Portfolio (continued) all prices and yields as of 03/10/14 Investment Sector & Price Dividend YTD 52 Week Price Current Security Name Industry Subsector Symbol 3/10/2014 Yield % Return % Return Target Allocation Information Technology Apple Computer Hardw are AAPL $ % -5% 23% $ % EMC Computer Hardw are EMC $ % 8% 11% $ % IBM Computer Hardw are IBM $ % 0% -11% $ % Maxim Integrated Products Semiconductors MXIM $ % 17% 3% $ % Microsoft Softw are - Systems MSFT $ % 1% 35% $ % Qualcomm Communications Equipment QCOM $ % 3% 15% $ % Materials Freeport-McMoRan Diversified Metals & Mining FCX $ % -15% -3% $ % Telecommunications Verizon Integrated Telecom Services VZ $ % -4% -2% $ % Utilities Source of prices and yields: Thomson Reuters Holdings are for information only and should not be deemed to be a recommendation to purchase or sell the securities mentioned. There are no guarantees that any securities mentioned will be held in a client's account. It should not be assumed that the securities transactions or holdings discussed were or will be profitable. Yields are indicative only as of the given date. Prices and yield fluctuate, and no assurance can be given that an actual portfolio will be able to obtain the same prices and / or yields. MORGAN STANLEY 4

5 Dividend Focused Balanced Portfolio all prices and yields as of 03/10/14 Investment Sector & Price Dividend YTD 52 Week Price Current Security Name Industry Subsector Symbol 3/10/2014 Yield % Return % Return Target Allocation Cash 5.0% Money Market 5.0% Fixed Income 33.0% Lord Abbett Short Duration Income F Short Duration LDLFX $ % PIMCO Income P Multi-Sector PONPX $ % Loomis Sayles Strategic Income Y Multi-Sector NEZYX $ % AllianceBernstein High Income Adv High Yield AGDYX $ % DoubleLine Total Return I Mortgage-Backed DBLTX $ % Templeton Global Total Return Adv Global Bond TTRZX $ % Eaton Vance Floating Rate I Floating Rate EIBLX $ % Equity 62.0% Broad Equity Market SPDR Diamonds Trust Mega Cap ETF DIA $ % SPDR S&P Dividend Large Cap ETF SDY $ % Consumer Discretionary Home Depot Home Improvement HD $ % 1% 18% $ % Starbucks Restaurants SBUX $ % -9% 25% $ % VF Corp Apparel VFC $ % -4% 47% $ % Consumer Staples CVS Drug Stores CVS $ % 2% 40% $ % Mondelez International Packaged Foods MDLZ $ % -3% 20% $ % Pepsico Beverages PEP $ % -2% 6% $ % Philip Morris International Tobacco PM $ % -7% -11% $ % Energy Chevron Integrated Oil & Gas CVX $ % -8% -3% $ % ENSCO International Oil & Gas Drilling - Offshore ESV $ % -8% -9% $ % Marathon Petroleum Refining & Marketing MPC $ % -6% -3% $ % National Oilw ell Varco Oilfield Equipment & Services NOV $ % -3% 15% $ % Williams Cos Oil & Gas Storage & Transportation WMB $ % 10% 26% $ % Financials Starw ood Property Trust REIT - Mortgage STWD $ % 9% 9% $ % Starw ood Waypoint Residential Trust REIT - Mortgage SWAY $ % 0.5% Source of prices and yields: Thomson Reuters MORGAN STANLEY 5

6 Dividend Focused Balanced Portfolio (continued) all prices and yields as of 03/10/14 Investment Sector & Price Dividend YTD 52 Week Price Current Security Name Industry Subsector Symbol 3/10/2014 Yield % Return % Return Target Allocation Healthcare Abbott Labs Medical Equipment ABT $ % 4% 16% $ % AbbVie Pharmaceuticals ABBV $ % -2% 37% $ % Johnson & Johnson Pharmaceuticals JNJ $ % 1% 20% $ % UnitedHealth Group Managed Care UNH $ % 4% 45% $ % Industrials General Electric Multi-Industry GE $ % -7% 10% $ % 3M Multi-Industry MMM $ % -4% 27% $ % Information Technology Apple Computer Hardw are AAPL $ % -5% 25% $ % EMC Computer Hardw are EMC $ % 7% 11% $ % IBM Computer Hardw are IBM $ % 0% -10% $ % Maxim Integrated Products Semiconductors MXIM $ % 17% 3% $ % Microsoft Softw are - Systems MSFT $ % 2% 36% $ % Qualcomm Communications Equipment QCOM $ % 3% 15% $ % Materials Freeport-McMoRan Diversified Metals & Mining FCX $ % -10% 3% $ % Telecommunications Verizon Integrated Telecom Services VZ $ % -4% 0% $ % Utilities Source of prices and yields: Thomson Reuters Holdings are for information only and should not be deemed to be a recommendation to purchase or sell the securities mentioned. There are no guarantees that any securities mentioned will be held in a client's account. It should not be assumed that the securities transactions or holdings discussed were or will be profitable. Yields are indicative only as of the given date. Prices and yield fluctuate, and no assurance can be given that an actual portfolio will be able to obtain the same prices and / or yields. MORGAN STANLEY 6

7 Investing can be an intimidating prospect for many people. Today s capital markets are complex, and the thought of sifting through thousands of available investments can be overwhelming. Most investors simply do not have the time or experience to gather and analyze all of the data necessary to make informed investment decisions. In such situations, it may make sense to partner with an experienced professional who understands your financial needs and can dedicate the time and resources to help you meet them. For over 30 years, Christopher Eckert has been helping investors prepare for and navigate through significant life events and financial transitions. To learn more about how his wealth management process can help you meet the challenges these major life transitions pose to your financial security, please visit his website or call for a complimentary consultation. MORGAN STANLEY 7

8 Disclosure: This material does not provide individually tailored investment advice. It has been prepared without regard to the individual financial circumstances and objectives of persons who receive it. The strategies and/or investments discussed in this material may not be suitable for all investors. Morgan Stanley Smith Barney LLC recommends that investors independently evaluate particular investments and strategies, and encourages investors to seek the advice of a Financial Advisor. The appropriateness of a particular investment or strategy will depend on an investor's individual circumstances and objectives. Equity securities may fluctuate in response to news on companies, industries, market conditions and the general economic environment. Companies cannot assure or guarantee a certain rate of return or dividend yield; they can increase, decrease or totally eliminate their dividends without notice. Please contact your Financial Advisor for a complete listing of all transactions that occurred during the last twelve months. This material is intended only for clients and prospective clients of the Portfolio Management program in the United States. It has been prepared solely for informational purposes only and it is not an offer to buy or sell or a solicitation of any offer to buy or sell any security or other financial instrument, or to participate in any trading strategy. Christopher Eckert is a Financial Advisor with Morgan Stanley Smith Barney and Portfolio Manager participating in the Morgan Stanley Smith Barney Portfolio Management program. The Portfolio Management program is an investment advisory program in which the client s financial advisor invests the client s assets on a discretionary basis in a range of securities. To learn more about the Portfolio Management Program, please contact your Morgan Stanley Smith Barney Financial Advisor. The Portfolio Management program is described in the applicable Morgan Stanley Smith Barney ADV Part 2, available at or from your Financial Advisor. Past performance of any security is not a guarantee of future performance. There is no guarantee that this investment strategy will work under all market conditions. Holdings are subject to change daily, so any securities discussed in this profile may or may not be included in your account if you invest in this investment strategy. Do not assume that any holdings mentioned were, or will be, profitable. The holdings, sector weightings, portfolio traits and other data for an actual account may differ from that in this material due to various factors including the size of an account, cash flows within an account, and restrictions on an account. Top holdings, sector allocation, portfolio statistics and credit quality are based on the recommended portfolio for new investors as of the date specified. Holdings lists indicate the largest security holdings by allocation weight as of the specified date. Other data in this material is believed to be accurate as of the date this material was prepared unless stated otherwise. Data in this material may be calculated by Morgan Stanley or by third party providers licensed by the Financial Advisors or Morgan Stanley. Material in this presentation has been obtained from sources that we believe to be reliable, but we do not guarantee its accuracy, completeness or timeliness. Third party data providers make no warranties or representations relating to the accuracy, completeness or timeliness of the data they provide and are not liable for any damages relating to this data. Morgan Stanley Wealth Management has no obligation to notify you when information in this presentation changes. Mutual Funds and Exchange Traded Funds are sold by prospectus only. The prospectus contains the investment objectives, risks, fees, charges and expenses, and other information regarding the mutual fund and variable annuity contract and its underlying investments, which should be carefully considered before investing. Prospectuses are available through your Financial Advisor. Read the prospectus carefully before you invest or send money Morgan Stanley Smith Barney LLC Member SIPC. MORGAN STANLEY 8