WA MAGAZINE JanFeb PDF A - Flipbook - Page 25
Originally launched in 2010, this
strategy responds to investors seeking
higher yields than the 3–3.5% traditionally offered by dividend-focused
portfolios. By writing options selectively,
Cullen has managed to double the yield
of its flagship portfolio to a target of
7%, a rate consistently achieved since
inception.
Cordle describes this approach as
both methodical and adaptive, integrating human judgment with quantitative
analysis to balance yield enhancement
and total return.
The Enhanced Equity Income strategy is now available as a separately
managed account, a mutual fund and,
most recently, an ETF (ticker: DIVP).
Diversification and discipline obviously extend the reach of what would
once have been considered an exotic
overlay program run by wild talents.
DIVP now caters to the needs of a broad
range of clients, from retirees seeking
income to institutional investors prioritizing risk-adjusted returns.
“Our goal is to offer equity exposure
with high current income and dividend
growth, creating an alternative to traditional bonds,” Cordle notes.
INTERNATIONAL EXPOSURE
Cullen’s reach is not confined to domestic markets. The firm’s international high
dividend value and emerging market
dividend strategies bring its disciplined
approach to global opportunities.
Cathy Howse points out that
dividend-focused investing is often
overlooked in emerging markets, where
growth stories dominate the narrative.
Yet, Cullen’s dividend-oriented strategy
reduces volatility while tapping into
compelling themes like nearshoring,
supply chain diversification, and technological advancement.
This approach delivers not only
income diversification but also downside protection during turbulent periods.
As with its domestic portfolios, the
emerging markets fund has maintained
positive performance over all rolling
five-year periods since its launch.
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The firm’s rigorous risk management
framework is an integral component
of its success. Cullen leverages both
quantitative analysis and qualitative assessments to maintain portfolios aligned
with its disciplined value philosophy.
For instance, the firm is careful to
trim positions that exceed valuation
targets, reinvesting proceeds into
opportunities with greater potential for
growth and dividend stability. This vigilant oversight is critical in safeguarding
client capital while ensuring consistent
income streams.
From there, Cullen’s expertise in
options strategies has allowed the firm
to differentiate itself further. Tim Cordle
explains how the covered call methodology adds a layer of complexity and
opportunity.
“We systematically evaluate every
position in the portfolio for options
suitability,” he shares, adding that this
process balances potential premiums
with the overarching goal of maintaining equity exposure. By dynamically
adjusting coverage levels based on market conditions, the firm ensures optimal
outcomes for clients.
The Enhanced Equity Income strategy has proven particularly appealing to
retirees and institutions seeking reliable
income in an era of historically low
interest rates. Cordle highlights that the
7% yield target achieved by this strategy
is both consistent and sustainable,
providing an attractive alternative to traditional fixed-income investments. “This
is about creating income streams that
grow alongside equity value,” he notes,
stressing the dual benefits of capital
appreciation and premium generation.
The global focus might be the secret
weapon here. In emerging markets, the
firm’s approach has defied conventional wisdom by emphasizing dividendpaying stocks rather than speculative
growth plays.
By identifying companies with strong
cash flow, stable earnings, and attractive yields, Cullen provides a lower-risk
gateway to some of the world’s fastestgrowing economies. This focus not
“Our goal is to
offer equity
exposure with
high current
income and
dividend growth,
creating an
alternative to
traditional bonds.”
–Timothy Cordle, MD & PM
only diversifies income sources but also
enhances overall portfolio stability.
ENGAGEMENT AND FLEXIBILITY
The firm’s commitment to education and
transparency further sets it apart. Cathy
Howse emphasizes the importance of
client communication, noting that Cullen
regularly participates in industry events
to foster dialogue and share insights.
“We see these interactions as opportunities to demystify our strategies and
build trust,” she explains. By engaging
with advisors and clients, the firm ensures its offerings remain relevant and
aligned with evolving investor needs.
Another significant element of the
approach is its adaptability. The firm’s
ability to offer its strategies across multiple investment vehicles, including mutual
funds, ETFs, and SMAs, underscores
its responsiveness to client preferences.
This flexibility enables advisors to tailor
solutions that meet specific objectives,
whether focused on income, growth, or a
blend of both.
Ultimately, Cullen’s enduring success lies in its unwavering commitment
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