MBA Dividend Income Portfolio

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The MBA Dividend Income Portfolio seeks to deliver a rising dividend yield at least 50% higher than the S&P 500 yield, combined with dividend growth and total returns comparable to the S&P 500 Total Return Index, but with lower volatility and reduced Beta over full market cycles.

Portfolio Composition & Mechanics:

• 40% U.S. Dividend Equity ETFs (currently SCHD)
• 60% Individual Dividend-Paying Stocks diversified across industries

Individual stock selection emphasizes:

• Dividend yields ≥ 150% of the S&P 500 yield
• Dividend growth rates (3-yr) at or above the S&P 500 growth rate
• Relative strength (3-yr) ≥ 1.00 vs. S&P 500
• Beta (3-yr) typically below 1
• Consistent historical dividend increases
• Industry and sector diversification

Portfolio Management & Rebalancing:

• Long-term holding of individual stocks for tax-efficient qualified dividends; no active trading of these individual positions.
• ETF holdings are tactically managed using Managed Beta Allocation (MBA) proprietary signals to potentially enhance returns and manage risk.
• Rebalancing occurs opportunistically, typically when individual holdings exceed 5% of the total portfolio, mandatory at 6%, or upon position replacements. Full-portfolio rebalancing occurs in response to primary trend-signal changes affecting both ETF and individual stock allocations.
• New client investments are allocated according to the previous calendar quarter-end model allocation.

Removal Criteria for Holdings:

• Significant dividend reductions
• Strategic sector reallocation

Current Holdings Summary (as of April 1, 2025)