Income Builder Portfolio

Separately Managed Account

The WCA Income Builder Portfolio seeks to invest in companies with rising dividends at attractive valuations. The portfolio uses a fixed income ladder to seek to manage volatility and provide a steady stream of income.

Combining the flexibility of a laddered bond portfolio with rising dividends can provide a hedge against inflation, and can be an appropriate addition to a retirement income portfolio. We view a well-constructed portfolio as a triangle. At the base of the triangle are high-quality bonds. Equity investments are then added to provide higher potential return.

60% RISING DIVIDEND EQUITY

We focus our attention on the 1,000 largest, actively traded companies listed on exchanges in the United States. From this starting point, we seek:

STEADILY RISING DIVIDENDS: Portfolio companies must have demonstrated at least five consecutive years of dividend increases. Failure to raise the dividend is grounds for removal from the portfolio.

CONSISTENCY: The watchword for the WCA Income Builder Portfolio strategy is consistency. Therefore, the selection process favors companies with strong balance sheets and consistent earnings that are capable of sustained growth of shareholder capital and income.

We believe that chasing yield without regard for capital growth is folly. Therefore, this portfolio seeks companies we believe are capable of growing both the dividend and shareholder capital over time.

40% INVESTMENT-GRADE CORPORATE BONDS

The Laddered Bond component seeks to provide a stream of income while mitigating risk. Bonds are actively chosen and monitored by Washington Crossing Advisors based upon a fundamental evaluation of balance sheet quality, trends in cash flow, interest coverage, and liquidity.

A laddered bond portfolio allows a systematic way of investing a portfolio without constantly guessing about the direction of interest rates. It also allows the income and yield of the portfolio to gradually adapt to a changing interest rate environment and maintains consistency in the average maturity.


The Case for Laddering Bonds

PDF After an extended period of historically low interest rates, income-focused bond investors have finally found relief as interest rates have risen to levels not seen since late 2007 (see Chart

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Qualityland

At Washington Crossing Advisors (WCA), we go to great lengths describing the high quality businesses selected in our Rising Dividend and Victory equity portfolios. We believe in buying quality companies

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Quality and Certainty

The only sure thing in investing is the uncertain. When we began the year, bearishness was rampant. Most Wall Street forecasters were expecting a recession, and the International Monetary Fund (IMF)

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A Host of Contradictions

This morning’s lead story in the Wall Street Journal is about the resilient U.S. economy. According to the report, strong hiring, consumer spending, stock market, and housing trends are all

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Please see important disclosures.