Return to flip book view

www.stjamesia.com St. James Investment Advisors 1-800-966-9343 High Dividend Yield Portfolio Objective The St. James High Dividend Yield Portfolio takes a total return approach to dividend investing, seeking attractive current income and capital appreciation through an actively managed portfolio of dividend-paying companies. The typical portfolio will have approximately 30 companies. The High Dividend Yield Portfolio, value-oriented approach, invests primarily in companies with above-average dividend yields and trading at reasonable discounts from our assessment of intrinsic value. Philosophy Absolute Return: We are absolute return investors and each investment must meet our strict fundamental research and macroeconomic criteria, not just offer opportunity relative to other alternatives. Long-term focus: We believe the best way to accomplish our goals is to accept short-term underperformance in exchange for long-term success. We expect to hold our investment positions unless fundamental valuation parameters change. We are not speculators and adhere to a strict value investment discipline. We are willing to hold cash. Why We Believe Dividends Are Important: • Over the long term, the return from dividends has been a significant contributor to the total returns produced by equity securities. According to Standard & Poor’s, dividends comprised an average of 35% of the monthly total return of the S&P 500 from 1926 to 2009. • Stocks with apparent high and sustainable dividend yields may be more resistant to a decline in price than lower yielding stocks because the stock is in effect “yield supported.” • There is an abundance of empirical evidence which suggests that portfolios consisting of high dividend yielding securities may produce attractive total returns over long measurement periods. Focus as bottom-up managers: Most of our energy goes to evaluating investment opportunities and trying to quantify potential downside scenarios. However, we do take some interest in the macro environment, as economic conditions profoundly affect the business models we are evaluating. Primary Portfolio Dividend-paying equities St. James Investment Advisors We are professional portfolio managers Committed to Value Investing. St. James is an independent, fee-only, United States Securities and Exchange Commission registered investment advisory firm, providing customized portfolio management services to individuals and their financial advisors. Partnership Investing We invest our money alongside you as partners in our process. As managers we have significant amounts of our own capital invested in the strategy. Governing Principles We will invest in companies with above-average dividend yields and an established history of paying dividends. We will treat your investment with St. James as if it were our own. We will remain significant investors with you in St. James Investment Advisors portfolios. Our independence as a firm allows us to focus on the interests of our clients in our decision-making process. Our decision-making process takes full advantage of individual insights within a partnership oriented culture. We are patient, long-term investors. We will discourage short-term speculators and market timers. We will communicate with our investment partners as candidly as possible. We think “benchmark risk” is part of investment life. Our firm’s goal is to earn good absolute investment returns over long periods of time without exposing our clients’ capital to undue risk. We do not think about any particular index when we make investment decisions.

All investing involves risk of loss, and the High Dividend Yield Portfolio investment strategy could lose money over short or even long periods. Companies with indicated dividend yields that are above the S&P 500 average are referred to as above-average dividend yields. Discussion and allocations of investments shown above reflect the portfolio’s investments on the date of this presentation and may not be representative of the portfolio’s future holdings. The Investment Highlight position described above was randomly selected and was not selected based on performance. Views expressed regarding a particular company, security, industry, or market sector should not be considered an indication of trading intent of any investments managed by St. James Investment Advisors. These views should not be considered investment advice, nor should they be considered a recommendation to buy or sell. Data is based on a representative account selected because it has the least number of restrictions and best represents the implementation of the strategy. Presentations of composite performance are available upon request. Part 2 of form ADV is available upon request or at www.stjamesia.com. www.stjamesia.com St. James Investment Advisors 1-800-966-9343 High Dividend Yield Portfolio Quarter Ending June 30, 2024 | Commentary Fundamentals and valuation are components for managing a portfolio that provide a sharper focus in navigating a path through the current U.S. economic and political environment. With the first half of 2024 presenting market volatility and a couple of surprises it is more important than ever to focus on these two aspects of portfolio management. A key change to markets in 2024 is expanding market breadth; given their earnings growth potential and valuation gaps, more stocks will be participating in the market. While the “Magnificent Seven” technology stocks remain popular, there is a strengthening case for broadening market returns. Even after removing these mega-cap tech stocks, Wall Street's steady earnings growth projection over the next two years remains encouraging. Focusing on fundamentals and valuation can help identify both overvalued and undervalued companies; a deep dive into the underlying fundamental aspects of a company’s business provides a more meaningful valuation of the company overall. While most investors are focused on growth investing, there are many other compelling reasons to consider when investing in value companies: underlying strengths, brand recognition, and skilled leadership drive growth and shareholder value. Furthermore, legendary investor John Templeton warns growth investors of the dangers of falling into the base-less “this time is different” mindset, but with value investing every decision is backed by highly researched, all-encompassing ideas that provide meaningful company insights. During the last quarter the St. James High Dividend Yield Portfolio benefitted with exposure to: During the last quarter the St. James High Dividend Yield Portfolio exposure to the following was negative: These following are the individual contributors and detractors from the portfolio during the last quarter: As of quarter-end, the St. James High Dividend Yield Portfolio had the following compositions: Investment Highlight Gilead Sciences (GILD) is a biopharmaceutical company engaged in the discovery, development, and delivery of medicines to Gilead prevent and treat life-threatening diseases, including HIV, viral hepatitis, and cancer. The Company primarily offers products in HIV, Oncology, Liver Disease, and Vekulaery (Covid-19 treatment). With 61 clinical-stage programs, the company has built up a strong pipeline to deliver transformative treatments to patients across the globe while collaborating with some of the biggest names in the healthcare industry, such as Arcus Biosciences, Merck, and Pionyr Immunotherapeutics, to develop next-generation therapeutics for serious viral diseases. Incorporated in 1987, Gilead now employs over 17,000 people and is headquartered in Foster City, California. Gilead Sciences currently has a market capitalization of $88.92 billion and saw 2023 revenue of $27.12 billion. • Industrials • Materials • Consumer Staples • Consumer Discretionary • Health Care • Select Communication Services Contributors: Detractors: Agnico Eagle Mines Ltd. CVS Health Corp. Bank of America Corp. McDonald’s Corp. Walmart Inc. CME Group Inc. Equities: 83.25% Ultra-Short Fixed Income: 15.00% Cash: 1.75% Total: 100.00%