Premium Dividend Portfolio

Premium Dividend Portfolio

What?

The Premium Dividend portfolio will invest in 25 companies in the UK and Europe that will give you a steady and growing stream of income from dividends. The companies we invest in demonstrate an ability to pay a consistent, growing dividend throughout the business cycle.

We employ ‘layers of confidence’ with a specific focus on the balance sheet, prudent accounting principles and the quality of the income streams, to ensure consistency and repeatability over the long-term. 

Why?

Since 1966 dividends have contributed more than 50% of the total return of equity markets. Compounding is the key to sustainable long term, investment returns.  The philosophy of compounding these dividends provides the framework on which to build a profitable portfolio.

What you need to know

Why Mole Valley Asset Management?
  • Expertise in income-based equity investment
  • The size of MVAM means that we can invest in the best companies regardless of their size, unlike larger investment houses.
  • Fees are fair and transparent, and we align our rewards to the success of our product.
Positives
  • Potential for strong returns.
  • Consistent, repeatable strategy.
  • Invest in good quality companies.
  • Money back usually within a week of receiving a redemption request.
Risks
  • Dividends are not guaranteed and are subject to change without notification.
  • The portfolio is concentrated, holding 25 companies, and therefore has additional company-specific risk.

We say…

We would not advocate putting your entire wealth in such a portfolio. While the rewards can be high so can the risks. However, if this sort of investment matches your risk profile then the Premium Dividend portfolio with MVAM is a vehicle that can make a difference to your and your dependents’ future wealth.

This portfolio is considered moderate risk and is suitable if you can withstand sharp fluctuations in the value of your investments in the short term. You should not buy this portfolio if:

  1. Your objective is to preserve capital.
  2. You cannot tolerate periods where your portfolio is at risk of loss.

You are looking to perform in-line or close to a benchmark.

Frequently asked questions

How many companies are in the portfolio?

We believe in concentrated portfolios. At any one time, there will be a maximum of 25 companies. This ensures that each position contributes towards the performance of the portfolio and the majority of the risk is a company-specific risk.

What happens to the dividends?

The dividends are reinvested in the portfolio. This allows the dividend income to compound over time.

How do you select the companies?

We have a disciplined investment approach that uses what we call ‘layers of confidence’. These layers of confidence look at the balance sheet and income statement of the company to analyse if we consider the dividend is sustainable in future years.

Do you invest in different industries?

Yes, we strongly believe in diversification of industry-specific risk and invest across all industries. To avoid putting all our eggs in one basket we ensure that we invest across many different industries. This is controlled and monitored at the portfolio construction level.

Why not just buy the biggest dividends?

The biggest dividends are rarely sustainable over the long term. Analysis suggests that those companies with the biggest dividends are unable to pay the large dividend in future years.

Warning

The value of your investment in this portfolio and the income from it may go down as well as up and you may not get back what you invested.