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CMA, in business since 1995, helps individuals, families and pension funds build wealth through comprehensive financial planning and high total return investment portfolio strategies.
CMA focuses on guiding individual clients and pension funds in a "financial strategy" to achieve three priorities:
1) Build maximum pension fund assets by using more predictable "Total Return Investments" that provide high current dividend income for reinvestment, growth of dividend income, and pension fund or portfolio capital appreciation potential,
2) Enjoy secure pension fund or retirement account resources by earning high and growing portfolio income,
3) Preserve your pension fund or retirement account capital for the next generations of retirees or beneficiaries.
The US stock market has been volatile for the past 10 years without any net upside appreciation to most investors or pension plans. (The S&P 500 Index has no cumulative appreciation gain for the past 10 years since 2000.) Investors are seeking alternative income-oriented investments to typical "growth stocks" to build wealth for individual investors or to grow pension fund asset positions. ( See: White Paper: "Underfunded Public Funds...It Can Stop Here!" )
CMA High Dividend Equities Portfolios provide: 1) High annual dividend income in the 6% to 8% range; 2) Growth of dividend income, and 3) Long term appreciation potential from its broad mix of "above average quality" equities within the portfolio. The Total Return potential of 6-8% annual dividend income and long term equity market appreciation makes the CMA High Dividend Equities Portfolios a favorable investment choice for capital preservation investors and pension funds.
What is the CMA High Dividend Equities Portfolio?
This investment Portfolio is designed for investors and pension funds seeking high current dividend income over a long period of time such as retirement and meeting long term actuarial pension payout streams. The Portfolio is structured to hold exchange-traded common and preferred stocks. There are several CMA Portfolios to choose from at 6% annual dividend yield up to 8%. All securities are compliant with the Illinois Public Pension Code and many other state Codes.
Approximately up to 85% of total Portfolio assets are in common equities that pay high dividend yields of approximately 3% and higher. The remaining approximate 15% or more of Portfolio assets are invested in preferred shares, which are senior to common shares of the issuing company. All issuing companies are large public companies, have been in business for many years, and Portfolio security selections span many different industries for economic diversification.
Portfolio holdings have high S&P Quality Rankings on the commons stocks in the A and B tiers, and preferred shares at A and B equivalency ranking. There are three Portfolios to choose from: The 6% Yield, the 7% Yield and 8% Yield….each referring to the portfolio's average annual approximate dividend yield. Portfolio yields vary as a result of the diversity of security selections, individual company issuer weighting of holdings, and more or less emphasis on share appreciation and dividend growth. ("Current Dividend Yield" in percent can vary on the portfolios based upon overall upward or downward fluctuations in portfolio share values.)
Which issuers make up the securities of the Portfolio?
Standard & Poor's has provided Quality Rankings, on approx 4,000 common stocks since 1956. Quality Rankings reflect the long-term growth and stability of a company's earnings and dividends. The CMA Portfolio of stocks with high Quality Rankings (A+, through B-) outperformed the S&P 500 Index and substantially outperformed portfolios of stocks with lower Quality Rankings over the 1986-2004 period. Portfolio risk is lower for companies with higher Quality Rankings. This Quality focus helps achieve capital preservation over long term periods.
CMA Portfolios, on a relative basis, exhibit stable and persistent earnings, high returns on equity, stable and wide profit margins, and low debt levels. Portfolios of stocks with high Quality Rankings provide downside protection. Over the 1986-2004 period, these portfolios significantly outperformed the S&P 500 and portfolios of companies with lower Quality Rankings in times of earnings deceleration and increasing credit risk, as we have now during the current US economic recovery.
Some of the current common equities used (See: High Dividend Company Profiles) are the common stocks of: Paychex, Emerson Electric, Home Depot, Kimberly Clark, Avery Dennison, Hawaiian Electric, Pfizer, AT&T, DuPont, Plum Creek Timber, Verizon. Preferred stock holdings include Duke Realty, Equity Residential, Harris Bank, HeathCare Properties, Post Properties.
Issuers of Portfolio securities have been in business as a public company, or a subsidiary of a public company, for at least 10 years and most issuers for many decades. Dividends on the commons and preferred shares have been paid continuously since original issuance over 5-10 years or longer. Preferred stocks have "Cumulative" dividend rights.
How can a Pension Fund use CMA High Dividend Equities Portfolios?
First, all securities within any of the three Portfolios are compliant with (Illinois Public Pension Code); Second, CMA is a Registered Investment Advisor that actively manages the three Portfolios for you at your designated custodian or trust company under a ( CMA Investment Advisory Agreement); Third,the Pension Fund’s designated Investment Consultant should contact CMA to confirm the suitability of any of the three CMA High Dividend Equities Portfolios to the Fund’s Investment Policy Declaration; Fourth, the Pension Fund’s attorney should contact CMA to discuss execution of the CMA Investment Advisory Agreement. Fifth, CMA investment management staff will appear before any interested Pension Fund Board to discuss and answer questions about the CMA High Dividend Equities Portfolios.
How can an individual open an account and utilize this porfolio?
Often, investor clients like to be a part of the "asset allocation" process, which means how much of their account funds are put into different asset classes such as: growth stocks, income real estate securities, fixed income bonds and preferred shares, or near-cash money market. This Portfolio gives an individual, willing to take stock market risk, an alternative to place either a small, moderate or large percentage of their assets in an equity income portfolio.
What are the Portfolio expense costs, minimum size and management style?
The CMA High Dividend Equities Portfolio Account is offered in a $50,000 minimum account size for retail investors, and $250,000 minimum for pension funds. CMA charges a .90% annual Investment Advisory Management Fee for managing this Portfolio account for retail investors. Pension Funds are subject to lower negotiated IA fee rates. Clients can direct our custodian, GreatBanc Trust Company, to make regular monthly, quarterly or annual distributions of Portfolio income to their checking accounts at their bank via ACH no-cost transfer deposits or receive checks in the mail. GBTC charges a minor custody fee for accounting, trade processing and statement preparation & distribution. The Portfolio will be actively managed by CMA, where changes in holdings would be made at times at the discretion of CMA to maintain quality of issuers and high yields.
Pension Funds that desire to utilize their own designated custodian other than GreatBanc Trust Company, a leading independent trust company in ESOP and pension fund custody, will require their custodian to interface with Advent MOXY automated order execution platform via CMA's or their own designated broker for DVP settlement.
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