Daniel Peris, Ph.D., CFA and Head of Strategic Value Dividend Team, answers questions about the the Federated Strategic Value Dividend Strategy including:
- Overview of the Federated Strategic Value Dividend Strategy
- How the strategy is performing in the current rising-rate environment
- What is the outlook and positioning strategy over the next 3 to 6 months
Questions About: Federated Strategic Value Dividend
Can you explain the Federated Strategic Value Dividend Strategy? Our income-first approach is driven by a core belief that we invest as owners of companies, not traders of stocks. As owners, we take the long view, seeking high-quality companies that make a practice of sharing the profits with the company owners, regardless of market conditions. Companies in our relatively concentrated portfolio tend to be non-cyclical and well established, with substantially higher dividend yields than the broader market and a history of paying above-market dividends and regularly increasing them.
How is the strategy performing in the current rising-rate environment? While our portfolio has no business sensitivity to near-term interest rates, the stock market historically bids down so-called “bond-proxies” in a rising-rate environment. That has been the case since July, and even more so since the election in November. While we are far from a bond proxy—we have rising coupons and our income streams are well above those of government bonds—we have a seen an approximately 10% “correction” in share prices since the summer, with no fundamental change in the income stream we generate.
To read the complete Q&A, including the outlook and positioning strategy for the fund over the next 3 to 6 months, read the Federated Investors market commentary online. Or, review JP Morgan's 4Q 2016 Guide to the Markets.
To learn more about Federated Investors and other Money Managers, give us a call at 1-800-541-7774 or contact us here to speak with one of WrapManager's Wealth Managers.
Read Federated Investor's full commentary here
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