BGF North American Equity Income Fund
Consistent, Disciplined and Time-tested Investment Process
The managers aim to identify investments that they believe will both increase in value over the long term and provide an attractive current income. In selecting portfolio securities, the Fund will generally employ a value-oriented analysis, but may purchase equity securities based on a growth-oriented analysis when such securities pay dividends or the managers believe that they have particularly good prospects for capital appreciation. Regardless of the market environment, the management team will typically seek out dividend-paying companies that exhibit:
- Steady, consistent earnings – Constructing a portfolio of companies that will consistently deliver solid earnings growth requires the skill of an experienced investment team. The portfolio management team looks for companies positioned to deliver relatively consistent earnings growth year after year. Over time, the compounding of sustainable growth rates generates strong absolute returns.
- High quality – Studies have proven that the risk characteristics of high-qualitycompanies are compelling, allowing full participation in strong markets, while providing greater protection in difficult markets. These companies typically possess more predictable earnings streams and generally experience less volatility in terms of stock price performance.
- Strong balance sheets – The team seeks companies demonstrating exceptional financial strength relative to the overall market. It focuses on companies maintaining low debt levels, providing high returns on equity and generating above-average free cash flow.
A Proven Process in a Difficult Climate
* The initial selection process begins with a broad equity universe, consisting of both domestic and global equities. † Financials and Utilities may exceed 50% debt-to-book cap.
The strategy does not necessarily look to buy the highest yielding companies at any given time, as analysis suggests that such companies may be vulnerable to dividend cuts. Hence the longer-term potential to grow dividends is regarded as a key factor in the selection process.
The Fund has no stated minimum holding period for investments and will buy or sell securities whenever the managers identify an appropriate opportunity. For example, the Fund may sell shares of a company when the company's prospects for capital appreciation deteriorate or when its dividend rates become unattractive or when the Fund identifies another company with more attractive prospects.
For Financial Professional Use Only. Not To Be Shown Or Distributed To Clients