Diversified Equity Income Investing Strategy: a Wall Street Transcript Interview with Shaun Hong, Managing Director and Equity Portfolio Manager/Research Analyst for Jennison Associates
67 WALL STREET, New York - July 15, 2013 - The Wall Street Transcript has just published its Investing in Dividend-Paying Companies and Other Strategies Report. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.
Topics covered: Cyclical Sectors, Exposure to Emerging Markets - Large-Cap, Deep-Value - Value Oriented Strategy - High-Quality Companies
Companies include: Cheniere Energy, Inc. (LNG), Bristol-Myers Squibb Co. (BMY), Merck & Co. Inc. (MRK), Sprint Nextel Corp. (S), MetroPCS Communications Inc. (PCS), Dish Network Corp. (DISH), Verizon Communications Inc. (VZ), AT&T, Inc. (T) and many others.
In the following excerpt from the Investing in Dividend-Paying Companies and Other Strategies Report, an expert portfolio manager discusses his investing methodology and top picks:
TWST: Please begin with an overview of the Equity Income Fund.
Mr. Hong: The Prudential Jennison Equity Income Fund's goal is to deliver a premium yield relative to that of the S&P 500. We're focused on yield, but we're also trying to deliver an attractive total return. The way we've worked to achieve these goals is through owning equities, but in a diversified manner, and that's a little different perhaps from your traditional dividend income fund.
What I mean by that is we diversify the portfolio by owning some higher-yielding-dividend names, as well as some of the more traditional, stable-yet-growing-dividend types of stocks and, finally, some very-low-yielding, sometimes zero-yielding stocks to help with the capital-appreciation side. All of this is underpinned by our point of view on the expected cash flow of these companies. We're looking to invest where the underlying companies have not only stable or growing cash flows but are also able to afford the dividend they're paying today, perhaps grow it, and/or afford the buyback they have in place or will put in place.
Diversification is important. We diversify by geography, by sector, and some by capital structure. For example, historically, between 20% and 40% of the fund has been invested in non-U.S. holdings. For the recent past, it's been around 25%. Canada typically has represented the largest share of non-U.S. holdings, followed by Western Europe. So our focus is typically the more traditional, developed countries, and then we'll own a little bit of emerging markets. But at the end of the day, the portfolio's composition is dictated by what we believe are the most attractive opportunities out there.
We also try to make sure the fund is well diversified across various industrial sectors...
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.
