Quality Dividend Value Portfolio Sell Discipline

The Investment Committee adheres to the following sell discipline within the context of our Quality Investing strategy:

• Price Appreciation
  We will sell a portion of the position when it becomes over-weighted in the portfolio.  For tax sensitive clients, we take particular care to weigh the benefits of reduced risk and opportunity costs versus the client's budgeted capital gains and the tax cost of doing the trade.

A position will be sold if the stock's yield falls below the S&P 500's dividend yield due to stock price appreciation.

• Fundamental Deterioration
  We regularly review holdings with a focus on dividends, coverage ratios, and financial strength. A significant deterioration in the business prospects, performance, or financial strength may be a reason to sell.  We continually monitor stock-price performance, analysts' estimate revisions, earnings surprises and corporate events for early warning signs of fundamental deterioration that may put the dividend at risk. 

A position will be sold if the stock loses its A-rating or eliminates its dividend.

• Enhanced Opportunities
  We may sell any stock and replace it with a stock that has a higher dividend yield or more attractive risk/return characteristics.