Brookmont Equity Dividend Portfolio, Series 28
Brookmont Capital Management (“Brookmont”) is an employee-owned registered investment advisor whose investment strategy is based on a portfolio of individual equities that provide attractive
current yields, potential dividend growth, and the opportunity for capital appreciation.
The Brookmont Equity Dividend Portfolio is a unit investment trust which invests in two types of equity securities:
- Dividend-paying companies with a long history of increasing dividend payments year-over-year. These companies have the potential to act as a hedge against economic uncertainty. A company’s
ability to reliably increase its dividend for years, or even decades, can be an indication of its financial strength or discipline.
- Dividend-paying companies within industries resulting in names with high active share and growth prospects.
Brookmont believes that investing in dividend paying companies should be just as much forward looking as backward looking and that is why the firm emphasizes earnings resiliency, dividend capacity,
strong management, and appropriate valuations that result in a high Brookmont Dividend Score.
The Importance of Dividends
Dividends have historically been one of the few constants in the world of investing, and they
have had a significant impact on stock performance, contributing nearly half of the stock market’s
total return. According to Ibbotson Associates, dividends have provided approximately 40% of the
10.30% average annual total return on the S&P 500 Index from 1926 through 2020. Of course,
past performance is no guarantee of future results. The S&P 500 Index is an unmanaged index
of 500 stocks used to measure large-cap U.S. stock market performance. The index cannot be
purchased directly by investors.
Bottom Up Research With Economic Tailwinds
- Determine Economic Trends – Typically, the investment team at Brookmont meets to
determine economic trends.
- Sector Allocation – Sector allocations are determined based on input from investment
- Industry Allocation – Portfolio is diversified across sector, style and size allocations.
Weightings are adjusted to desired percentages, if additional exposure is needed, the
Brookmont research team selects names from their watchlist.
- Determine Investable Universe – Rigorous fundamental research process begins with
screening the investable universe for what Brookmont believes to be top quartile long-term
return on invested capital (ROIC) drivers. ROIC is an accounting measure that gives investors
direction on how efficiently companies are operating.
- Evaluate Company Fundamentals – Analysts review company financials, quarterly and
annual reports, and earnings call transcripts to understand the direction of each company.
- Create Proprietary Model – Analysts then create a proprietary model for each company
- Final Selection – The Brookmont Dividend Score is applied to each company under
review and the final selection is made.
This unit investment trust seeks above-average total return through a combination of capital
appreciation and dividend income; however, there is no assurance the objective will be met.
| Not FDIC Insured Not Bank Guaranteed May Lose Value
You should carefully consider the portfolio investment objective, risks,
and charges and expenses before investing. Contact your financial professional or
call First Trust Portfolios L.P. at 1.800.621.1675 to request a prospectus,
which contains this and other information about the portfolio. Read it carefully
before you invest.
investment in this unmanaged unit
investment trust should be made with an
understanding of the risks involved with
owning common stocks, such as an
economic recession and the possible
deterioration of either the financial
condition of the issuers of the equity
securities or the general condition of the
One of the securities held by the trust is issued by a real estate investment trust (REIT). Companies involved
in the real estate industry are subject to changes in the real estate market, vacancy rates and competition,
volatile interest rates and economic recession.
An investment in a portfolio containing equity securities of foreign issuers is subject to additional risks,
including currency fluctuations, political risks, withholding, the lack of adequate financial information, and
exchange control restrictions impacting foreign issuers.
Large capitalization companies may grow at a slower rate than the overall market.
As the use of Internet technology has
become more prevalent in the course of
business, the trust has become more
susceptible to potential operational risks
through breaches in cybersecurity.
The COVID-19 global pandemic has resulted in major disruptions to economies and markets around the world. Financial markets have experienced extreme volatility and severe losses, negatively impacting global economic
growth prospects. The duration of the COVID-19 outbreak and its effects cannot be determined with certainty and may exacerbate other political, social and economic risks.
The value of the securities held by the
trust may be subject to steep declines or
increased volatility due to changes in
performance or perception of the issuers.
Although this portfolio terminates in
approximately 15 months, the strategy is
long-term. Investors should consider their
ability to pursue investing in successive
portfolios, if available. There may be tax
consequences unless units are purchased
in an IRA or other qualified plan.