Capital Wealth Planning, LLC (CWP) founder and chief investment officer Kevin Simpson proudly announced the firm’s Enhanced Dividend Income SMA (separately managed account) strategy ranked number one in the Morningstar™ option writing category out of 33 Option Writing SMA Managers. This ranking is based on a five-year time period as of March 31, 2019.
“Our rules-driven approach, consistency and discipline are key contributors to how we earned this number one ranking. Although investors often think absolute return when considering covered call writing strategies, we take a different approach. At CWP, we believe there’s not only risk to the downside but upside risk as well – the risk of missing out on potential capital gains that strong long-term equity market cycles can possibly offer,” said Lead Portfolio Manager Josh Smith.
“The strategy is managed on a total return basis, and we exercise patience when making decisions,” Simpson added. “CWP portfolio managers target the strategy to earn 2% to 5% of annual income from option premiums – a tactical, covered call overlay covering roughly 30% to 60% of the portfolio on average over the course of the year.”
The Enhanced Dividend Income SMA Strategy features a concentrated domestic equity portfolio of 20 to 25 mega-cap blue chips from the S&P 100. The objective of the portfolio is to achieve a consistent estimated 5% to 7% combined yield from dividend and option premium. CWP’s goal is to earn an estimated 2.5% to 3% of annual portfolio income from dividends and 2% to 5% from the option premiums, which is dependent on levels of volatility and market conditions.
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The Enhanced Dividend Income SMA Strategy is a 5-Star Morningstar™ rating among 33 peer, option writing SMAs in the category. Learn more about Morningstar rating methodologies.
About Capital Wealth Planning
Capital Wealth Planning, LLC (CWP) is an SEC registered fee-only investment advisory firm based in Naples, Florida. Building and managing proprietary income-oriented portfolios since 2005, the company has approximately $1.3 billion of assets under management. The firm’s methodologies are
designed to enhance risk-adjusted returns and offer portfolio protection while delivering monthly cash flow. Ranked by Financial Advisor Magazine in 2018 as one of the top 50 fastest growing SEC registered investment advisors in the country, CWP leads the implementation of covered call strategies with their Enhanced Dividend Income Portfolio, ESG Enhanced Dividend Income Portfolio, ETF Covered Call Portfolio and Covered Call Overlay Service. Additional information is available at www.capitalwealthplanning.com.
Disclosure: You should not assume that any discussion or information contained herein serves as the receipt of, or as a substitute for, personalized investment advice from CWP. It is published solely for informational purposes and is not to be construed as a solicitation nor does it constitute advice, investment or otherwise. To the extent that a reader has questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. A copy of the CWP written disclosure statement regarding CWP’s advisory services and fees is available upon request. CWP’s comments are an expression of opinion. While CWP believes these statements to be true, they always depend on the reliability of CWP s credible sources. Past performance is no guarantee of future returns.
Investing in options involves risk that must be considered and reviewed with a professional prior to investing. Before engaging in the purchase or sale of exchange-traded options, investors should understand the nature and extent of their rights and obligations and be aware of the risks involved, including the risks pertaining to the business and financial condition of the issuer of the underlying stock. Listed options are not suitable for all investors. Prior to buying or selling options, a person must be provided with and review a copy of CHARACTERISTICS AND RISKS OF STANDARDIZED OPTIONS. A copy of this document may be obtained from Capital Wealth Planning, LLC, 1016 Collier Center Way, Suite 200, Naples, FL 34110.
5-year rating out of 33 option writing SMAs as of March 31st2019. © 2019 Morningstar, Inc. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results.
