Brentview News & Insights

Legacy dividend growth manager brings an experienced team and strategy from Santa Barbara Asset Management

Brentview Investment Management, LLC announced that the Brentview Dividend Growth Strategy received a Morningstar Five-Star Overall Rating.

Brentview's President was recently featured in U.S. News & World Report's: The Ultimate Guide to Dividend Stocks

Despite the backdrop of record volatility, the Brentview Dividend Growth strategy outperformed the S&P 500, our primary index in the first quarter of 2020. On a gross basis our Dividend Growth strategy returned -18.25% vs. the S&P 500 total return of -19.60%. The year started out with typical seasonal strength as the month of January has historically been positive. Ultimately the otherwise complacent stock market was shaken as volatility surged as the quarter progressed. During the month of March, data shared from global health organizations underscored the quick spread of the COVID-19 virus. This news understandably caused concern among investors and equity markets responded with the highest measured volatility for the S&P 500 since 1928 as seen in (Chart1). We are grateful that our portfolio is constructed and designed with risk management in mind. During the month of March alone the Dividend Growth strategy had a gross return of -10.88% vs. -12.35% for the S&P 500. Ultimately our investment philosophy of “bend but don’t break” has designed a portfolio that drove our quarterly outperformance during the most stressed month in history.

In the fourth quarter, our strategy underperformed the S&P 500, our primary index, returning 7.6% vs. 9.1% for the index. For 2019, our strategy outperformed the index by 260 basis points, returning 34.1% vs. 31.5% for the index. Ultimately 2019 was the best performing year for the S&P 500 index since 2013. Progress towards a China and USA “skinny” trade deal encouraged investors to take on more risk and that became more evident as the quarter progressed. The Federal Reserve earlier in the quarter lowered the Federal Funds rate target to 1.50%-1.75% as the trade wars fears began to impact the economy. As time passed, yield curve inversion fears seemed to fade into the rear-view mirror and even cracks in the overnight Repo markets went unnoticed.

In the third quarter, our strategy outperformed the S&P500, our primary index, on a gross and preliminary basis by 330 basis points, returning 5% vs. 1.7% for the index. Year to date, again on a gross and preliminary basis our strategy is outperforming the index by 400 basis points, returning 24.6% vs. 20.6% for the index. With the recent shifts in valuation Brentview’s dividend growth portfolio positioned itself to take advantage of the current market environment. We trimmed select positions within communications services and real estate that had recently outperformed. In addition, we increased our health care weighting by adding a new position that has an attractive dividend yield but also exposure to the pharmaceutical and biotech industries.