U.S. Income & Growth
Greystone’s U.S. Equity Income & Growth Fund provides investors an actively managed, broadly diversified portfolio of U.S. stocks that provide a predictable stream of income. Over time, the fund pursues modest capital appreciation.
The fund has a parallel structure, philosophy and process to Greystone’s Canadian Equity Income & Growth Fund, adjusted for the differences of the larger American market.
Reliable income comes from selecting a base of companies that exhibit predictable and growing levels of profitability. More specifically, our professionals are looking for stocks with earnings growth, because rising earnings mean a current income stream and often the capital appreciation of higher stock prices.
A stock is more likely to be included if its profitability is growing faster than the market rate and if realized results meet or exceed the market bottom-up as new companies replace holdings whose growth has plateaued.
The U.S. Equity Income & Growth Fund differs from Greystone’s “core” U.S. Equity Fund with respect to dividend income. The core U.S. Equity Fund concentrates on stocks with a superior growth rate of earnings and cash flow regardless of the prospect for near-term dividend payout. In addition to growth characteristics, the U.S. Income & Growth Fund also incorporates dividend yield into its selection process.
Greystone’s disciplined approach uses both quantitative and qualitative tools to build an income-oriented portfolio. By using carefully selected factors, we screen the entire American market every day to isolate possible opportunities.
The quantitative tools automatically identify those companies worthy of personal attention.
Greystone’s U.S. equity specialists have specific sector and company responsibilities. Thus, each team member supplements quantitative information with an in-depth knowledge of the companies in each industry and its economic requirements.
In our team-based approach, the entire team considers a member’s recommendation to add or remove a security from the portfolio. Once accepted, we continuously monitor a stock for changes in performance outlook. This means tracking the latest valuations, sales, cash flow, earnings surprises, etc.
When a stock displays characteristics no longer consistent with our style, it’s sold and replaced with a higher-ranking stock. Sell decisions are based on changes in the fundamental or qualitative reasons for the original purchase, negative changes in earnings/valuation, and changes in management, ownership, market share, products or liabilities of the candidate.
Risk reduction permeates both our investment philosophy and its implementation. It starts with the way we build portfolios. Greystone’s U.S. equity team ensures fund participants are broadly diversified across industry sectors, and companies within those industries.
The fund invests in common stock, securities convertible into stock and real estate income trusts on a selective basis. The fund typically holds 25 to 30 issues. Cash equivalents may be used to a maximum of 30% of the fund, although cash is generally held to a minimum. A single company cannot represent more than 5% of the fund.