The ability to pay cash from reported earnings points to the inherent quality of those earnings.
Minimum Investment (Class I)
The performance data quoted represents past performance and is not a guarantee of future results. It is not possible to investin an index.
(standard deviation) than S&P 500
Sources and Disclosures
Not All Dividend-Payers Are Created Equal
The 2000s (12/31/1999-12/31/2009) encompassed the bursting of the “technology-media-telecom” bubble as well as the beginning of the financial crisis. During this period, the index’s income return was positive, while its price and total return were both negative.
W. Jeff Bahl
Dividend payments can provide a strong foundation for a stock’s total return, through bull and bear markets. Dividend payments have been crucial to the S&P 500’s total return:
The Fund’s approach has helped it to achieve
(from inception through 3/31/2018):
Primary objective of income growth
Founded in 1990, Bahl & Gaynor Investment Counsel is an independent registered investment advisor located in Cincinnati, Ohio. As of December 31, 2017, the firm managed or advised $22.4 billion.
Stephanie S. Thomas
Minimum Investment (Class A/C)
1972 - 2018
Diversified income stream requires
each stock be limited to generating
a maximum 6% of the income
Regular dividends that follow a defined payout ratio are a
useful proxy for management’s confidence in the business.
Dividends are a powerful tool
in communicating financial health to the capital markets.
George G. Strietmann
a strong foundation
AAM/Bahl & Gaynor Income Growth Fund (“the Fund”) strives to provide a growing level of income, downside protection and long-term capital appreciation in excess of inflation.
Dividend growth is a vitally important component of Bahl & Gaynor’s investment philosophy. The Fund seeks to invest in companies that not only pay a dividend, but grow it regularly. Dividend growth potentially enhances income and may help improve investors’ purchasing power in a variety of inflationary environments.
The Fund may be suitable for clients looking for a conservative large cap quality growth mandate. Notably, MLPs, preferred stocks, options, ETFs, ordinary shares and convertible securities are not used.
Explore three main reasons for considering dividend-paying stocks:
can't be faked
Ticker symbols Class A: AFNAX / Class C: AFYCX / Class I: AFNIX
Income Growth Fund
In today’s environment, dividend-paying stocks may provide an attractive level of income, coupled with the potential for capital appreciation in excess of inflation. Remember that there is, however, no guarantee that a company will increase or continue to pay dividends over time.
William F. Bahl
Eleanor K. Moffat
High-quality focus helps avoid
“dividend traps” (i.e., high-yielding stocks with unsustainable dividends)
Class A: AFNAX / Class C: AFYCX / Class I: AFNIX
Highlights of the Fund's Investment Approach
John B. Schmitz
1 Source: Ned Davis Research. The return of the price index is referred to as capital appreciation. Income return is assumed to be the Index’s total return minus its capital appreciation. Total Return = Capital appreciation plus reinvested dividends during the time period. Time period from stats above = 12/31/1929–3/31/2018
2 Source: Ned Davis Research. Based on equal-weighted geometric average of total returns (including dividends) of dividend-paying and non-dividend-paying historical S&P 500 Stocks. Uses Indicated Annual Dividends to identify dividend- paying stocks on a rolling 12-month basis.
Amount of the S&P 500
Index’s total returns
driven by dividends
The Upside of Downside Protection
Dividends can provide
a cushion during
Lori A. Hudson
Dividend-paying stocks averaged an almost 3%
higher return per year than
non-dividend payers during
DJIA: The Dow Jones Industrial Average is a price-weighted average of 30 actively traded blue-chip stocks. DJIA covers all industries with the exception of transportation and utilities.
S&P 500 Index: The S&P 500 Index is an unmanaged market capitalization-weighted index used to measure 500 companies chosen for market size, liquidity and industry grouping, among other factors.
Dividend-Paying vs. Non-Dividend-Paying Stocks: Each stock’s dividend policy is determined by its indicated annual dividend. Ned Davis Research classifies a stock as a dividend- paying stock if the company indicates that it is going to be paying a dividend within the year. A stock is classified as a non-payer if the stock’s indicated annual dividend is zero.
The index returns are calculated using monthly equal-weighted geometric averages of the total returns of all dividend-paying (or non-paying) stocks. A stock’s return is only included during the period it is a component of the S&P 500 Index. The dividend figure used to categorize the stock is the company’s indicated annual dividend, which may be different from the actual dividends paid in a particular month.Dividend-Growing, No-Change-In-Dividend, and Dividend-Cutting: Dividend Growers and Initiators include stocks that increased their dividend anytime in the last 12 months. Once an increase occurs, it remains classified as a Grower for 12 months or until another change in dividend policy. No-Change stocks are those that maintained their existing indicated annual dividend for the last 12 months (i.e., companies that have a static, non-zero dividend). Dividend Cutters and Eliminators are companies that have lowered or eliminated their dividend anytime in the last 12 months. Once a decrease occurs, it remains classified as a Cutter for 12 months or until another change in dividend policy.
You should carefully consider the investment objectives, potential risks, management fees, and charges and expenses of the Fund before investing. The Fund's prospectus and summary prospectus contains this and other information about the Fund, and should be read carefully before investing. You may obtain a current copy of the Fund's prospectus and summary prospectus by calling 888.966.9661.
This material is not intended to be a recommendation or investment advice, does not constitute a solicitation to buy or sell securities, and is not provided in a fiduciary capacity within the meaning of the Employee Retirement Income Security Act of 1974 (ERISA) and the Internal Revenue Code. The information provided does not take into account the specific objectives or circumstances of any particular investor, or suggest any specific course of action. Investment decisions should be made based on an investor’s objectives and circumstances and in consultation with his or her advisers.
Unless otherwise stated, all information and opinions were produced by sources we believe to be accurate and are subject to change. Additional information may be required to make an informed investment decision. AAM may make a market in or have other financial interests in any given security with which this analysis suggests may be benefited from its conclusions. AAM does not offer tax advice. Past performance does not guarantee future results. Any forward looking statements are not to be considered as forecasts but rather are presented for your consideration.
Not FDIC Insured. Not Bank Guaranteed. May Lose Value.
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Advisors Asset Management, Inc. (AAM) is an SEC-registered investment advisor and member FINRA/SIPC.
About Bahl & Gaynor
Nicholas W. Puncer
July 5, 2012
Historically, dividends have provided a cushion against volatility and market downturns with dividend-paying stocks tending to weather ups and downs better than non-dividend-payers.
a strong foundation
$2,500 initial/$500 subsequent
The S&P 500’s annualized
return with dividends
reinvested – compared to
5.6% without dividends
During the 1930s, which included the Great Depression, dividends represented 1,693% of the S&P 500’s total return.
Large cap companies with
a minimum $1 billion market cap
Christopher M. Rowane
S&P 500 Index
Dividends represented 100% of the S&P 500’s 2011 total return.
$25,000 initial/$5,000 subsequent
Dividend yield greater than 2% at time
Dividend Payment Risk: An issuer of a security may be unwilling or unable to pay income on a security. Common stocks do not assure dividend payments and are paid only when declared by an issuer’s board of directors. The amount of any dividend may vary over time.
An investment in the Fund is subject to risks and you could lose money on your investment in the Fund. The principal risks of investing in the Fund include, but are not limited to, investing in foreign securities, investing in small-and mid-cap companies, and focused risk. The prices of foreign securities may be more volatile than the securities of U.S. issuers because of economic conditions abroad, political developments, and changes in the regulatory environment of foreign countries. Investments in small and mid-cap companies involve greater risks including increased price volatility compared to the market or larger companies. Although the Fund is diversified, the Sub-advisor intends to focus its investments in the securities of a comparatively small number of issuers. Investment in securities of a limited number of issuers exposes the Fund to greater market risk and potential losses than if its assets were diversified among the securities of a greater number of issuers. More information about these risks may be found in the Fund’s prospectus.
Dividend-paying stocks declined, on average, about half as much as
non-dividend payers in bear markets from 1/31/1972-3/31/2018.
Power of Dividend Growth
James E. Russell
Meet the investment team
Large Cap Core
For more information on the AAM/Bahl & Gaynor Income Growth Fund, visit us online or please complete the form below and we will be in touch shortly.
Edward A. Woods
Scott D. Rodes
High quality, fundamental equity strategy that strives to increase income and grow principal. The Fund does not invest in MLPs, preferred stocks or convertible securities.
Dividend-Payers' Performance Across Monetary Cycles
Charles A. Pettengill
About the AAM/Bahl & Gaynor Income Growth Fund
Bahl & Gaynor’s investment process is designed to identify companies with strong records of dividend growth through a range of economic cycles.
The AAM/Bahl & Gaynor Income Growth Fund emphasizes high-quality companies with reasonable valuations and consistent dividend growth potential.
The ability to pay a dividend is an important indicator to investors that the company has
a proven and sustainable business model.
can't be faked
Ellis D. Hummel
Primarily current and growing income, secondarily downside protection and thirdly long-term capital appreciation
Vere W. Gaynor
Dividends can tell you a lot about a company’s financial health and are a direct reflection of its earnings and cash flow. A strong dividend policy signals:
Dividends can provide
a cushion during
Why Dividend-Paying Stocks?
AAM/BAHL & GAYNOR