Constructing a Portfolio of Quality Companies with a History of Steady and Rising Dividends: Expert Money Managers Joseph C. Williams and Matthew J. Schmitt Share Their Investment Approach

Wall Street Transcript

67 WALL STREET, New York - July 12, 2013 - The Wall Street Transcript has just published its Investing in Dividend-Paying Companies and Other Strategies Report offering a timely review of the sector to serious investors and industry executives. This special feature contains expert industry commentary through in-depth interviews with Money Managers. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

Topics covered: Bottom-Up Stock Selection - Cyclical Sectors, Exposure to Emerging Markets - Large-Cap, Deep-Value - Value Oriented Strategy - High-Quality Companies - Value Investing, Deep Value - Longer-Term Investing

Companies include: JPMorgan Chase & Co. (JPM), Wells Fargo & Company (WFC), Chevron Corporation (CVX), ConocoPhillips (COP) and many more.

In the following excerpt from the Investing in Dividend-Paying Companies and Other Strategies Report, expert portfolio managers discuss portfolio-construction methodology and investment philosophy:

TWST: How would you describe your general investment philosophy and approach to the Value Fund?

Mr. Williams: As far as the Value Fund goes, we are looking for companies with good capital-appreciation potential, but then we also have been emphasizing a higher dividend yield, as we do believe dividends offer a very attractive alternative to the fixed income markets.

We have certainly seen a test of that in the last few weeks, as interest rates have been rising, but we do believe stocks with attractive yields are quite attractive over the next several years, even though interest rates have moved up a little bit. In the Commerce Value Fund we have increasing dividends providing a rising income stream, and we think that's going to be a very attractive investment vehicle for customers to use over the next several years.

TWST: Please give us a snapshot of the Value Fund in terms of its holdings, its strategy.

Mr. Schmitt: It's a fairly focused portfolio. We typically have around 45 stocks in the portfolio, typically all very good, quality companies with a history of steady and rising dividends. Most of the names in the portfolio are recognizable and familiar, which investors like and appreciate.

The current dividend yield is in the 3.5% range before the expense ratio of the fund, so in the high 2%s on an after-fee basis, which we think is an attractive yield. We are not looking for the ultra-high dividend stocks that are out there, we are looking for good companies that can continue to increase their dividends over time.

Mr. Williams: We are using the universe of the Russell 1000 to select our names. We typically come up with 100 to 110 different...

For more of this interview and many others visit the Wall Street Transcript - a unique service for investors and industry researchers - providing fresh commentary and insight through verbatim interviews with CEOs, portfolio managers and research analysts. This special issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

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