Enhanced Dividend Income Portfolio
CWP’s Enhanced Dividend Income portfolio (EDIP) is an equity portfolio made up of mega cap, high quality, blue chip stocks that is diversified across the traditional 10 S&P 500 sectors. The allocation is strategically designed to deliver income by tactically selling short-term covered calls against 30-60% of the underlying holdings to generate additional income.
Highlights of the portfolio include:
CWP actively manages sector allocation and opportunities to participate in defensive and cyclical trends given the relevant economic cycle
CWP screens for growth and value stocks that have a history of increasing dividends and possess strong fundamentals
Designed to deliver an estimated annual cash flow of 4-7% gross of fees and commissions between dividend and covered call premiums, plus the potential for capital appreciation
Unlike a systematic covered call program, CWP is not obligated to continuously cover each individual equity position and limit capital appreciation
When one of the underlying stocks demonstrates strength or an increase in implied volatility, CWP managers identify that opportunity and sell call options tactically
To deliver an additional 2-3% of annual income, the portfolio does not have to be covered 100% of the time.
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DETAILED PERFORMANCE REPORT
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5-year rating out of 33 option writing SMAs as of March 31st, 2019
The Morningstar Rating for separate accounts, commonly called the star rating, is a measure of a separate account’s risk-adjusted return, relative to other separate accounts in the same Morningstar Category. Separate accounts are rated from 1 to 5 stars, with the best performers receiving 5 stars and the worst performers receiving 1 star. Separate accounts are rated for up to three periods (three, five, and 10 years), and ratings are recalculated each quarter. The Morningstar Rating for separate accounts uses an enhanced risk-adjusted return measure, which accounts for all variations in a separate account’s monthly performance, with more emphasis on downward variation. Separate accounts are ranked against others in the same category and stars are assigned as follows: Top 10% 5 stars, Next 22.5% 4 stars, Middle 35% 3 stars, Next 22.5% 2 stars, Bottom 10% 1 star.