Bahl & Gaynor Small Cap Dividend ETF · AMEX:SCDV
Bahl & Gaynor Small Cap Dividend ETF — Bahl & Gaynor — Investor Presentation (May 2024)
30 slides from Bahl & Gaynor Small Cap Dividend ETF's investor presentation, May 2024
Slide 1: Dividends Income Growth WRAP
Dividends Income Growth WRAP Pay Dividends® Bahl & Gaynor, Inc. 255 East Fifth Street, Suite 2700 Cincinnati, OH 45202 As of March 31, 2024 W: www.bahl-gaynor.com
Slide 2: Bahl & Gaynor Overview
Bahl & Gaynor Overview We are guided by the philosophy that Dividends Pay Dividends®. Bahl & Gaynor views its employee ownership structure as an extremely effective retention tool for promoting team stability and investment process execution. Assets The Team Our Firm † $50.2B under 96 employees 100%
Slide 3: Investment Committee
Investment Committee Generalist Industrials & Transportation Consumer Staples Vere W. Gaynor - Emeritus Charles A. Pettengill, CFA Peter M. Kwiatkowski, CFA J. Eric Strange, CFA Hired: June 1990 Hired: May 1997 Hired: January 2019 Hired: April 2019 52 years experience 33 years experience 25 years ex
Slide 4: Dividends and Capital Appreciation: A powerful combination
Dividends and Capital Appreciation: A powerful combination Dividends have contributed 39% of the S&P 500’s average annual total return from 1925 to 3/31/2024.1 Breakdown of S&P500 Returns by Dividends & Capital Appreciation 2,500,000 Cumulative Return Index (Base = 100, Logarithmic) Monthly Data 12/
Slide 5: Dividend Policy Matters
Dividend Policy Matters Hypothetical Growth of $100 Investment (6/30/1927-12/31/2023)1 $1.75MM Core Dividend Yield Stocks $1.64MM Total Equity Market Cumulative Return Index (Base = $100) $1.50MM Non-Dividend Paying Stocks $1.25MM $1.00MM $0.97MM $0.75MM $0.50MM $0.42MM $0.25MM $0.00MM 1927 1962 196
Slide 6: The Low-Beta Anomaly
The Low-Beta Anomaly A historically robust complement to dividends and dividend growth style Sharpe Ratios of Beta-sorted Portfolios¹ Annualized Return and Risk of S&P 500 by Dividend Policy2 (1/31/1990 – 2/29/2024) (1/31/1990 – 3/31/2024) 0.70 12.5% Dividend Growers 0.60 0.56 0.52 11.5% Annualized
Slide 7: Dividend Growth Has the Potential to Enhance Long-term Purchasing Power
Dividend Growth Has the Potential to Enhance Long-term Purchasing Power Shifting focus from absolute yield to dividend growth may create the potential for long-term purchasing power accretion. Dividend growth may be more important than current yield alone 8.0% 2.6% Yield at 8% Annual Growth 2.6% Yie
Slide 8: Why Dividends?
Why Dividends? Bahl & Gaynor typically invests in high-quality companies that pay growing dividends. We believe a strong dividend policy signals: Earnings power Earnings quality Regular dividends that follow a The ability to pay cash from defined payout ratio are a useful reported earnings points to
Slide 9: Increasing “Magnificent 7” Dispersion
Increasing “Magnificent 7” Dispersion Widening dispersion may present a risk to cap-weighted exposure Magnificent 7 Total Return 2023 versus 1Q2024 2023 1Q24 250% 239.0% 82.5% 80% 194.1% 200% 60% Total Return (%) Total Return (%) 150% 37.4% 40% 101.7% 18.7% 100% 80.9% 20% 12.1% 10.6% 8.0% 58.6% 58.2
Slide 10: Secular Trends in Investor Style Preference
Secular Trends in Investor Style Preference1 Value vs. Growth Relative Total Return (Since Data Inception 2 - 3/31/2024) 140 130 S&P 500 Value Cumulative Relative Total Return Index S&P 500 Growth 120 121.2 110 100 90 80 72.0 70 60 1988 1993 1998 2003 2008 2013 2018 2023 ▪ Bahl & Gaynor’s dividend g
Slide 11: Income Growth Overview
Income Growth Overview Goals Strategy Bahl & Gaynor’s Income ▪ Unique, fundamental equity strategy focused on high current and Growth strategy seeks: growing income to generate long-term purchasing power. 1 Income Growth ▪ Dividends provide tax-favored income for individuals. 2 Downside Protection ▪
Slide 12: Inherent Risk Mitigation
Inherent Risk Mitigation A risk aware investment philosophy that has historically produced competitive risk-adjusted returns relative to the benchmark 1 High & Consistently Growing Income¹ 1 Goals ▪ Dividend yield of 2.6%2 from 40+ stocks, all of which pay a dividend ▪ Average stock contributed 2.1%
Slide 13: Investment Process
Investment Process The Bahl & Gaynor Income Growth strategy invests in high-quality companies that typically produce steady earnings and dividend growth. Bottom-Up Fundamental Fundamental Investment Committee Quantitative Screen Sector Review Security Investigation Review & Implementation ▪ At least
Slide 14: Income Growth Results – 1Q2024
Income Growth Results – 1Q2024 Strong cash flow growth at enhanced yield History of Actual Dividend Income Earned 1 Q2 2021 - %ofChange History in Portfolio Actual Dividend Income Income (1) Earned 1 Dividend Yield2 Income Growth 1Yr Growth 6.5% S&P 500 ETF Consumer Price Index 3.5% 5.7% Income Grow
Slide 15: Income Growth Portfolio Dividend Analysis
Income Growth Portfolio Dividend Analysis† A harmonic balance between yield and growth Company Name 1-Year Dividend Growth 5-Year Average Dividend Growth¹ Dividend Yield Income Percentage 10+ Years of Dividend Increases 18 Dividend increases from portfolio Abbott Laboratories AbbVie Inc 7.8% 4.7% 11
Slide 16: Income History: Yield on cost
Income History: Yield on cost is an important consideration ▪ Yield on cost is the actual dividend income earned by the initial investment specified at the starting date. It can only grow through owning stocks that increase the dividends they pay over time. ▪ The Income Growth strategy generated $14
Slide 17: Income Growth WRAP Composite Performance
Income Growth WRAP Composite Performance As of March 31, 2024 Income Growth WRAP Performance (Gross and Net) vs. S&P 500 12% 10% 8% 6% 4% 2% 0% January February March 1Q24 Income Growth WRAP (Gross) 1.60% 3.37% 3.78% 8.99% Income Growth WRAP (Net) 1.60% 3.37% 3.00% 8.18% S&P 500 1.68% 5.34% 3.22% 10
Slide 18: 2022 versus 2023 Income Growth WRAP Composite Performance
2022 versus 2023 Income Growth WRAP Composite Performance A clear market bifurcation 2022 versus 2023 Income Growth WRAP & S&P 500 Dividend Performance by Characteristics -8.14% Income Growth WRAP (Gross) 7.34% 2022 2023 -10.85% Income Growth WRAP (Net) 4.18% -18.11% S&P 500 Index 26.29% -38.54% Non
Slide 19: 1Q24 Income Growth WRAP Composite Performance
1Q24 Income Growth WRAP Composite Performance 1Q24 dividend paying and equal-weight stocks lagged mega-cap stocks 1Q2024 Income Growth WRAP & S&P 500 Performance Income Growth WRAP (Gross) 8.99% Income Growth WRAP (Net) 8.18% S&P 500 Index 10.56% Non-Dividend Payers 10.15% Dividend Yield 2% or Great
Slide 20: Risk-Adjusted Return Results
Risk-Adjusted Return Results Active, differentiated risk adjusted return profile vs. index Risk Adjusted Returns: Sharpe Ratio1 (as of 3/31/2024) Standard Deviation 0.97 12.16% 1 Year 0.69 11.95% 1.87 13.04% 1.04 14.23% 0.53 16.07% 5 Year 0.33 16.19% 0.71 18.21% 0.44 18.63% 0.69 13.31% 10 Year 0.44
Slide 21: Income Growth WRAP Composite Performance
Income Growth WRAP Composite Performance Long-term focus has provided competitive through-cycle returns relative to style proxies and benchmark Annualized Return (as of 3/31/2024) 30% 25% 20% 15% 10% 5% 0% 1 Year 5 Year 10 Year 15 Year S/I¹ Income Growth WRAP (Gross) 17.20% 10.67% 10.70% 13.86% 10.1
Slide 22: Income Growth WRAP Risk/Reward Analysis
Income Growth WRAP Risk/Reward Analysis: Percentile rankings have indicated a strong risk/reward profile Income Growth Total Risk/Reward Since Inception¹ as of 3/31/2024 15% More Return More Return Less Risk More Risk 14% 13% Rate of Return 12% 11% Income Growth WRAP (Gross) S&P 500 10% 9% S&P 500 >
Slide 23: Balanced Sector Exposures vs. the Benchmark
Balanced Sector Exposures vs. the Benchmark Attentiveness to valuation and volatility as part of portfolio construction Sector TTM P/E 1 Portfolio Weights Sector Beta 2 Income Income Growth 3 – Growth 3 S&P 500 S&P 500 Income Growth 3 S&P 500 I nformation Technology 29.8x 36.8x (12.8%) 1.39 1.45 Com
Slide 24: Income Growth Model Portfolio
Income Growth Model Portfolio as of March 31, 2024 Income Growth Sector Allocation History S&P 500 % of Income 1 Sect or 4 Q’1 3 4 Q' 1 4 4 Q' 1 5 4 Q' 1 6 4 Q' 1 7 4 Q' 1 8 4 Q' 1 9 4 Q' 2 0 4 Q' 2 1 4 Q' 2 2 4 Q' 2 3 1 Q' 2 4 1 Q' 2 4 1 Q' 2 4 Communication Services - - - - - 0.0% 1.4% 3.3% 2.0% 0
Slide 25: Income Growth WRAP Composite Performance
Income Growth WRAP Composite Performance Income Growth versus S&P 500 and Other Indices Annual & Quarterly Income Growth WRAP Income Growth WRAP S&P 500 Equal Weight S&P 500 Russell 1000 Value Performance (Gross) (Net) 1Q 2024 8.99% 8.18% 10.56% 7.91% 8.99% 2023 7.34% 4.18% 26.29% 13.87% 11.46% 2022
Slide 26: Income Growth WRAP Platform Composite
Income Growth WRAP Platform Composite December 31, 2005 (inception date) - December 31, 2022 “Pure” Benchmark 3 Year Ex-Post Standard Deviation Total Net Gross Return (%) Number of Composite Composite Non-fee Paying Total Firm Total AUA Year Return (%) Return (%) S&P 500 Accounts Dispersion (%) Comp
Slide 27: Trusted Investment Partners
Trusted Investment Partners Vere W. Gaynor Robert S. Groenke Mr. Gaynor is Co-Founder, Director Mr. Groenke is Portfolio Manager & Principal, Emeritus, Portfolio Manager & Principal. He Chief Executive Officer & President. He is is responsible for portfolio management, responsible for portfolio mana
Slide 28: Trusted Investment Partners
Trusted Investment Partners Charles A. Pettengill Edward A. Woods Mr. Pettengill is Portfolio Manager & Principal, Mr. Woods is Portfolio Manager & Principal, Board Chairman. He is responsible for portfolio Board Director. He is responsible for management, investment research of the portfolio manage
Slide 29: Trusted Investment Partners
Trusted Investment Partners Eleanor K. Moffat Christopher M. Rowane Mrs. Moffat is Portfolio Manager & Principal. Mr. Rowane is Portfolio Manager & Principal. She is responsible for portfolio management, He is responsible for portfolio management, investment research of the consumer investment resea
Slide 30: Disclosure
Disclosure Investment advisory services provided through Bahl & Gaynor Investment Counsel (“B&G”), a federally registered investment adviser under the Investment Advisers Act of 1940. Registration does not imply Information or a certain level of skill or training. More information about B&G can be f