The Diversified Dividend Trust seeks to provide dividend income potential coupled with the potential for long-term capital appreciation.
Past performance is no guarantee of future results. Investment returns and principal value will fluctuate with changes in market conditions. Investors' units, when redeemed, may be worth more or less than their original cost.
This information does not constitute an offer to sell or a solicitation of any offer to buy: nor shall there be any sale of these securities in any state where the offer, solicitation, or sale is not permitted.
Principal Investment Strategy
The Trust consists of a diversified portfolio of dividend-paying equity securities. The Sponsor believes that dividends are often a good indicator of a corporation’s current financial condition and furthermore, may signal management’s belief in a profitable future for the corporation. Investors seeking to return to the often volatile equity markets may consider the income available from a group of dividend-paying stocks as a logical first step toward reentry into such markets.
The sponsor selects domestic companies that it believes are core holdings of a well-diversified domestic dividend-paying portfolio. To select the portfolio the sponsor follows a disciplined process which includes both quantitative screening and qualitative analysis. The sponsor begins with the companies currently in the Russell 3000® Index and identifies a universe of stocks with higher indicated dividend yields than their average counterpart within the same Global Industry Classification Standards (“GICS”) sector, excluding real estate investment trusts. From this universe of approximately 400 companies, the sponsor identifies approximately 40 companies for inclusion in the portfolio through a qualitative analysis based on factors such as but not limited to:
Cash-flow Adequacy: The sponsor favors companies with recent earnings, operating cash-flow, and free cash-flow significantly higher than the dividends paid.
Balance Sheet: The sponsor favors companies that possess overall financial strength and exhibit balance sheet improvements relative to their peers and the marketplace.
Valuation: The sponsor favors companies whose valuations appear to be attractive based on measures such as price-to-earnings, price-to-book and price-to-cash flow.
Industry Leadership: The sponsor favors companies that possess a strong competitive position among their domestic and global peers.
Growth: The sponsor favors companies with a history of (and prospects for) above average growth of dividends, sales and earnings.
For the final step the sponsor weights the selected stocks such that the portfolio has no more than approximately 20% (as of the date of deposit) in any one given GICS sector.
The Potential of Dividend Reinvestment
One factor that may provide increased returns for shareholders over long periods of time is dividend reinvesting. Reinvesting dividends has historically had a significant compounding effect on investor returns.
The Russell 3000® Index measures the performance of the 3,000 largest U.S. companies based on total market capitalization, which represents approximately 98% of the investable U.S. equity market. As of the latest reconstitution, the average market capitalization was approximately $84.39 billion; the median market capitalization was approximately $1.176 billion. The index had a total market capitalization range of approximately $482.940 billion to $27 million. It is not possible to invest directly in the Russell 3000® Index. The Trust will not try to replicate the performance of the Russell 3000® Value Index and will not necessarily invest any substantial portion of its assets in securities in the Index. There is no guarantee that the perceived intrinsic value of a security will be realized.
Risks and Other Considerations
As with all investments, you can lose money by investing in this trust. The trust also might not perform as well as you expect. This can happen for reasons such as these:
Please see the Trust prospectus for more complete risk information.
Unit Investment Trusts are fixed, not actively managed and should be considered as part of a long-term strategy. Investors should consider their ability to invest in successive portfolios, if available, at the applicable sales charge. UITs are subject to annual fund operating expenses in addition to the sales charge. Investors should consult an attorney or tax advisor regarding tax consequences associated with an investment from one series to the next, if available, and with the purchase or sale of units. Guggenheim Funds Distributors, LLC does not offer tax advice.
Read a prospectus and summary prospectus (if available) carefully before investing. It contains the investment objective, risks charges, expenses and the other information, which should be considered carefully before investing. To obtain a prospectus and summary prospectus (if available) click here or call 800.820.0888.
Investing involves risk, including the possible loss of principal.
Guggenheim Investments represents the following affiliated investment management businesses of Guggenheim Partners, LLC: Guggenheim Partners Investment Management, LLC, Security Investors, LLC, Guggenheim Funds Distributors, LLC, Guggenheim Funds Investment Advisors, LLC, Guggenheim Partners Advisors, LLC, Guggenheim Corporate Funding, LLC, Guggenheim Partners Europe Limited, Guggenheim Partners Fund Management (Europe) Limited, Guggenheim Partners Japan Limited, GS GAMMA Advisors, LLC, and Guggenheim Partners India Management. Securities offered through Guggenheim Funds Distributors, LLC.
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• Not FDIC Insured • No Bank Guarantee • May Lose Value
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