Brookmont Equity Dividend Portfolio, Series 35
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 traditionally been one of the few constants in the world of investing, helping
to buffer volatility in both good and bad markets. When markets decline, dividends have the
potential to offset losses, and when markets rise, dividends have the potential to enhance returns.
A dividend is a payment from a company’s earnings. Since corporations are not obligated to share
their earnings with stockholders, dividends may be viewed as a sign of a company’s profitability
as well as management’s assessment of the future.
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.
Securities of non-U.S. issuers are subject to additional risks, including currency fluctuations, political risks, withholding, the lack of adequate financial information, and exchange control restrictions impacting non-U.S. 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.
In February 2022, Russia invaded Ukraine which has caused and could continue to cause significant market disruptions and volatility within the markets in Russia, Europe, and the United States. The hostilities and sanctions resulting from those hostilities could have a significant impact on certain investments as well as performance.
The COVID-19 global pandemic and the ensuing policies enacted by governments and central banks have caused and may continue to cause significant volatility and uncertainty in global financial markets. While the U.S. has
resumed “reasonably” normal business activity, many countries continue to impose lockdown measures. Additionally, there is no guarantee that vaccines will be effective against emerging variants of the disease.
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.