Brentview News & Insights

The 1st quarter of 2022 turned into a dramatic pivot point for understanding a company’s underlying business risk. Every day, equity investors around the world gauge and evaluate opportunities based on revenues, cashflows, and earnings. In January, investors were bracing for a less accommodative Federal Reserve. Most if not all, did not expect the late February Ukraine invasion. Seemingly overnight, multinational companies from all corners of the globe had to assess their exposure to the region, the extent of their specific business risk, and the potential steps that each company planned on taking considering the Russian invasion.

Every day, equity investors around the world gauge and evaluate opportunities based on revenues, cashflows, and earnings. However, over the last few weeks, these measures have become secondary to the vast amount of quickly changing news and disturbing images of lives disrupted. While we cannot imagine what this experience might be like, our thoughts are with those impacted. As a result of this significant event, we also need to consider how it might impact our clients and portfolio holdings.

For the fourth quarter of 2021, the Brentview Dividend Growth strategy outperformed our primary index, the S&P 500, by 125 basis points. The Brentview Dividend Growth strategy returned 12.28%, gross of fees, while the S&P 500 gained 11.03%. Key drivers for our strategy were found within the Health Care and Consumer Discretionary industry sectors. When reviewing the entire portfolio, only two of the eleven industry sectors, Information Technology and Real Estate, were detractors against our quarterly results.

In this newly created role, and in support of continued growth, John Ginley has joined the Brentview team as Director, Business Development. John most recently led the sales efforts within the U.S. Intermediary Distribution group at BMO Global Asset Management serving financial advisors affiliated with independent broker dealer and RIAs. Prior to joining BMO, John held similar sales management roles at Advisors Asset Management (AAM) and Nuveen Investments.

It is not uncommon to have guidelines within an investment portfolio. In fact, to generate repeatable results an investor should have some parameters in place to assure that an investment approach is reliable, repeatable, and consistent. However, sometimes screening methodologies are introduced to quickly eliminate companies from a broader list towards a shorter investable universe.

The S&P 500 had a fast start to the third quarter of 2021 only to be slowed by negative returns in the final month. September’s -4.7% return marked the first monthly drop since January. Despite a poor September, the S&P 500 managed a 0.6% return for the third quarter, compared to Brentview Dividend Growth’s return of -1.2%. Market volatility had been relatively contained for several months and in a steady decline since the beginning of the pandemic in early 2020 as seen in Chart 1.

Dividend investing is a conservative way to approach equities. One common trap that many investors fall into is solely focusing on dividend yield alone. The chart below shows the relative performance since 2015 of S&P 500 constituents.

Brentview Investment Management, LLC, is pleased to announce that our Dividend Growth separately managed account (SMA) strategy has been added to the Large Cap Core segment of the Envestnet | PMC Select List, effective July 8th.

Stocks continued their record run in the second quarter of 2021. The S&P 500 1st half return of 15.3% in 2021 turned in the third best six month return stream. As seen in Exhibit 1, 1st half 2019 was the strongest period with an 18.5% return, followed by 1st half 1998 with 17.7%. All said, the S&P 500 completed its fifth straight quarter of gains, a feat not seen since the 1953-1954 period. Non payers ended the quarter on a very strong note, especially during the last month.

The financial industry is known for being a boys club, especially where asset management is concerned. Firms with at least 50% minority or women ownership represented just 0.9% of total assets under management (AUM) in funds in 2017, according to the Knight Foundation's latest "Diversifying Investments" report. If you lower the bar to include firms with 25% to 49% diverse ownership, the number hardly improves at 1.3% of total AUM.