DIVIDENDS AND FIXED INCOME

Historically, the relationship between stocks and bonds is low; making some combination of these asset classes the cornerstone of many diversified portfolios. We believe the use of dividend-growth stocks improves the complementary relationship equities have with fixed income investments, allowing us to build portfolios more consistent with our clients’ objectives and risk tolerance.

ThomasPartners Strategies aim to align its fixed income allocation with its economic outlook while always remaining cognizant of its three primary objectives of monthly income, income growth, and competitive total returns over time.

COMBINING DIVIDEND GROWTH WITH FIXED INCOME (1978-2017)

The assets used to construct the this chart consist of the S&P 500® Total Return Index, a subset of the S&P 500 Total Return Index that only includes dividend growers or initiators (“Dividend Growers group”), and the Bloomberg Barclays U.S. Intermediate Gov/Credit Index. Please see additional explanatory notes on the Disclosure link below. Past performance does not guarantee future results. S&P Dow Jones Indices.

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Source: S&P Capital IQ Compustat, Bloomberg Barclays Indices, S&P Dow Jones Indices.

The Risk-Reward Relationship of Equities & Fixed Income chart is a graphical depiction of the mean-variance analysis, which is a process of weighting risk (variance) against expected return. Mean-variance analysis is a component of Modern Portfolio Theory, and uses a mathematical framework to assemble portfolios of different assets to maximize the expected return for a given level of risk (measured by standard deviation). The assets used to construct the this chart consist of the S&P 500® Total Return Index, a subset of the S&P 500 Total Return Index that only includes dividend growers or initiators (“Dividend Growers group”), and the Bloomberg Barclays U.S. Intermediate Gov/Credit Index. Please see additional explanatory notes on the Disclosure link below. Past performance does not guarantee future results. S&P Dow Jones Indices.

THOMASPARTNERS FIXED INCOME POSITIONING

Within fixed income, we seek to deliver reliable yields that appropriately compensate investors for the risks taken on their behalf, while dampening overall portfolio volatility. We accomplish this with careful analysis of the major fixed income sectors and opportunistic purchases of fixed income investments with yield characteristics that we believe fairly compensate investors for the risks to which they are exposed.