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Salient International Dividend Signal Institutional Portfolio

Overview

Philosophy

The Salient International Dividend Signal Institutional investment philosophy is based on the belief that by emphasizing higher-yielding stocks, the portfolio can participate in stock market advances and protect capital better than competing strategies during stock market declines.

Strategy

TheSalient International Dividend Signal Institutional Portfolio seeks to provide long-term capital appreciation and income by investing in dividend-paying companies located outside of the United States. The portfolio invests primarily in stocks that regularly pay dividends. Investments are selected based on higher-relative dividend yields, dividend growth potential and anticipated stock price appreciation. This internationally oriented portfolio is typically structured with 60 to 100 stocks diversified across seven to ten sectors. Geographically, the portfolio is typically diversified across 15 or more countries.

Process

  1. Screen for companies with an absolute dividend yield higher than the local market or the S&P 500
  2. Identify companies with unusually high historical relative yield
  3. Qualitatively review resulting companies to identify the most attractive candidates
  4. Determine weighting based upon perceived risk and strength of the investment catalyst
Team

David L. Ruff, CFA

Managing Director & Senior Portfolio Manager
San Francisco

Randall T. Coleman, CFA

Portfolio Manager
San Francisco

Bruce R. Brewington

Portfolio Manager
San Francisco

Eric Sagmeister

Portfolio Manager
San Francisco

Paul Broughton, CFA

Portfolio Manager
San Francisco

Aaron Visse, CFA

Portfolio Manager
San Francisco

Hwee-See Teng

Investment Analyst
San Francisco

Performance

Quarterly Performance (%) as of 09/30/2017

  Q3 YTD 1 YR 3 YR 5 YR 10 YR SINCE
INCEPTION
Composite GROSS 5.75 19.83 14.92 3.61 6.32 3.95 7.69
Composite NET 5.53 19.09 13.97 2.74 5.43 3.12 6.99
MSCI ACWI ex-USA NET 6.16 21.12 19.61 4.70 6.97 1.28 4.82
MSCI ACWI ex-USA HDY NET 4.98 16.53 17.06 1.42 5.39 1.19 6.42
Periods greater than one year are annualized.
Quarterly returns are preliminary.
Inception Date – 07/01/99
Gross returns are shown as supplemental information. Please see important disclosure below.
Net returns are calculated using a highest management fee of 0.85%, applied monthly. Prior to January 1, 2009, net returns are calculated using a 0.50% management fee, applied monthly.

GIPS Performance & Disclosure

Year End Gross Return Net Return* MSCI ACWI ex-USA MSCI ACWI ex-USA HDY Assets (millions) Number of Accounts Annual Composite Dispersion‡ Annualized 3-Year
Standard Deviation
Composite MSCI ACWI ex-USA MSCI ACWI ex-USA HDY
20160.68%-0.16%4.50%7.89%$221.635 or fewerNM10.46%12.51%13.29%
2015-5.07%-5.88%-5.66%-12.38%$303.275 or fewerNM10.77%12.13%13.40%
2014-3.48%-4.29%-3.87%-3.87%$382.175 or fewerNM12.04%12.81%13.28%
201314.31%13.35%15.29%16.27%$351.535 or fewerNM14.88%16.23%15.54%
201223.98%22.95%16.83%16.84%$200.035 or fewerNM18.03%19.26%19.20%
2011-10.69%-11.45%-13.71%-6.20%$47.705 or fewerNM21.26%22.72%24.40%
201019.50%18.51%11.15%3.71%$6.155 or fewerNM24.09%27.29%28.58%
200937.39%36.28%41.45%48.91%$5.525 or fewerNM21.33%25.24%26.32%
2008-36.26%-36.62%-45.53%-45.87%$0.245 or fewerNM16.96%20.88%20.32%
200714.11%13.57%16.65%15.18%$0.555 or fewerNM9.70%10.63%10.69%
200624.68%24.09%26.65%33.26%$0.135 or fewerNM10.19%10.22%9.76%

The International Dividend Signal Institutional Composite contains all discretionary, equity only portfolios which invest primarily in dividend-paying stocks located outside the U.S. The portfolio typically holds 60-100 stocks diversified across 7-10 sectors. Beginning January 1, 2011, the composite includes only accounts invested in ADRs and ordinary foreign equities. The International Dividend Signal Institutional Composite was created on December 14, 2008. Prior to July 15, 2016, International Dividend Signal Institutional was named International Dividend Institutional.

Performance shown prior to June 2015 was achieved by the portfolio management team at Forward. Forward was acquired by Salient in June 2015. Salient is the trade name for Salient Partners, LP, which together with its subsidiaries provides asset management and advisory services. Salient claims compliance with the Global Investment Performance Standards (GIPS®) and has prepared and presented this report in compliance with the GIPS standards. Salient has been independently verified for the periods beginning January 1, 2011, to March 31, 2016. The verification report is available upon request. Verification assesses whether (1) the firm has complied with all the composite construction requirements of the GIPS standards on a firm-wide basis, and (2) the firm’s policies and procedures are designed to calculate and present performance in compliance with the GIPS standards. Verification does not ensure the accuracy of any specific composite presentation. Salient includes all assets of Salient Advisors, LP, Endowment Advisors, LP, and the non-trust and advisory assets of Salient Capital Advisors, LLC, which are all being managed by Salient’s Asset Management Group. The firm maintains a list of composite descriptions, which is available upon request.

Results are based on fully discretionary, institutional accounts under management in this style. Taxable and non-taxable accounts are included. Certain portfolios in the composite participate in dividend capture and utilize leverage, which are not principal components of the composite strategy. Past performance is not indicative of future results.

For comparison purposes the composite’s primary benchmark is the MSCI All Country World ex-USA Index (ACWI ex-USA), which seeks to provide broad-based, low cost exposure to both the developed and emerging markets. The composite’s secondary benchmark is the MSCI ACWI ex-USA High Dividend Yield Index, which reflects the performance of large- and mid-cap stocks across 45 developed and emerging markets in the MSCI ACWI that exhibit high, sustainable dividend income. As of December 31, 2015, the International Dividend Signal Institutional Composite will no longer be measured against the MSCI EAFE. The MSCI ACWI ex-USA and the MSCI ACWI ex-USA High Dividend Yield Index are used going forward, as they are more closely aligned with the universe that the strategy invests in.

The U.S. dollar is the currency used to express performance. Gross returns are stated after transaction costs but before management fees and net returns are shown after transaction costs and a highest management fee of 0.85%, applied quarterly. Prior to January 1, 2009, net returns are shown after transaction costs and a management fee of 0.50%, applied quarterly. Forward’s investment management fee schedule is 0.85% on the first $250 million, 0.75% on the next $750 million, and 0.65% in excess of $1 billion. Actual investment advisory fees incurred by clients may vary. Returns include the reinvestment of all income. Returns are shown gross of foreign withholding tax on dividends, interest income, and capital gains. Policies for valuing portfolios, calculating performance, and preparing compliant presentations are available upon request.

Performance prior to September 30, 2005, represents performance of the international equity segment results carved out from all fee-paying, discretionary Berkeley Capital Management Balanced International Dividend portfolios. The composite consisted of 100% carve-outs prior to September 30, 2005. Cash has been allocated to the carve out in proportion to the international equity segment percentage of the total portfolio.

Related Resources

Separately Managed Accounts and related investment advisory services are provided by Forward Management, LLC, a federally regulated Investment Advisor.