The Emerging Markets Dividend Strategy Portfolio, Series 28 ("Trust") seeks to provide dividend income with a secondary objective of capital gains.
|Wrap Fee Price||$9.8667|
|Remaining Deferred Sales Charge||$0.1350|
|Mandatory Maturity Date||2/25/2020|
|NASDAQ Ticker Symbol||CGEMCX|
|Inception Unit Price||$10.0000|
|Inception Liquidation Price||$9.8650|
|Deferred Sales Charge Dates||
|Number of Holdings||30|
|Historical Annual Dividend Distribution||$0.5190|
All data is subject to change daily. Data may differ from the prospectus due to different data sources or market changes. Please refer to prospectus for additional information about the trust including the portfolio section criteria. Source: FactSet Research Systems Inc. unless otherwise noted. The total percentages may not be equal to 100% due to rounding. N/A indicates that certain securities have not been identified and/or classified by the data provider. A unit is a combination of securities or types of securities traded together.
|Weighted Average Price/Earnings (P/E) Ratio||11.12|
|Weighted Average Price/Book (P/B) Ratio||1.88|
|Weighted Average Market Cap (MM)||$46,745.86|
|Non US Common Stock||100.00%|
|Metals & Mining||12.84%|
|Oil Gas & Consumable Fuels||13.48%|
|Diversified Telecommunication Services||6.45%|
|Wireless Telecommunication Services||6.78%|
|Semiconductors & Semiconductor Equipment||6.94%|
|Real Estate Management & Development||3.15%|
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.
Principal Investment Strategy
The Trust will invest in a portfolio of securities of 30 companies headquartered in developing nations with a primary objective of providing dividend income and a secondary objective of capital gains.
The Sponsor, with the assistance of Guggenheim Partners Investment Management, LLC (“GPIM”), an affiliate of the Sponsor and Guggenheim Partners, LLC, has selected the securities to be included in the Trust’s portfolio. The Sponsor and GPIM believe that companies that distribute significant dividends on a consistent basis demonstrate strong financial strength and positive performance relative to their peers.
As a result of this strategy, the Trust is concentrated in securities issued by companies located in Asia.
The Trust’s portfolio was constructed and the securities were selected on November 19, 2018 (the “Security Selection Date”) using the Security Selection Rules described below.
Security Selection Rules:
In constructing the Trust’s portfolio, 30 securities were selected based on the following rules-based criteria. Except as set forth herein, the investment strategy utilizes information provided by FactSet Research Systems, Inc.
1. Initial Universe: Start with an initial universe of equity securities (common shares or depositary receipts referencing common shares) traded on any public equity exchange in the world, and which also meet the following criteria as of the Security Selection Date:
• Exclude all companies headquartered in any developed country, which are limited to Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Japan, Luxembourg, the Netherlands, New Zealand, Norway, Portugal, Scotland, Singapore, Spain, Sweden, Switzerland, the United Kingdom and the United States.
• Exclude all companies headquartered in any tax haven country that is used primarily by companies with operations in developed nations. These countries are limited to the Bahamas, Bermuda, the British Virgin Islands, the Cayman Islands, Guernsey, Isle of Man, Jersey and Liberia.
• Security may not be an exchange-traded fund, investment fund, limited partnership or Trust.
• Exclude securities with a market capitalization less than $200 million. Market capitalization is determined by the closing price as of the Security Selection Date. If the security is not U.S. dollar-denominated, the currency rate used for the security is the closing price, with currency exchange rates provided by WM/Reuters when share price is non-U.S. dollar-denominated.
• Exclude securities with a liquidity of less than $1 million, however, American Depositary Receipts (“ADRs”) traded on either the New York Stock Exchange or NASDAQ Stock Market do not have to meet this liquidity minimum as long as the ADR’s referenced foreign security does meet the minimum liquidity criteria based on that foreign security’s own trading volume. Liquidity is determined by the average 30 day trading volume in U.S. dollars and is calculated as the average of a 30 trading day look back from the Security Selection Date (i.e., trading volume in shares multiplied by the closing price for the day, with currency exchange rates provided by WM/Reuters when share price is non-U.S. dollar-denominated).
• For companies with multiple listings, only one security is included. Preference is given to a ADR traded on either the New York Stock Exchange or NASDAQ Stock Market, if available, or to the most liquid security, as determined by the above calculation, if the company is only traded on non-U.S. exchanges.
2. Rank on Fundamentals: Rank every company identified in the initial universe against other companies in the same sector, as provided by FactSet Industry Classification System, along each of the following reported financial metrics. Each ranking is determined as of the Security Selection Date using the most recently reported information and uses a scale of 1 through 10 (1 representing the highest scoring 10% in the sector and 10 representing the lowest scoring 10% in the sector):
• Return on assets as provided by FactSet Research Systems, Inc., and calculated as latest four quarters of reported operating income divided by the average of most recent reported total assets and year ago reported total assets.
• Earnings before interest and taxes for the latest four quarters divided by enterprise value, as provided by FactSet Research Systems, Inc. Enterprise value is determined by adding the equity market capitalization as of the most recent closing price with the total outstanding long term and short term debt as determined by the most recently available balance sheet, and then subtracting any cash and short term investments as determined by the most recently available balance sheet.
• Year-over-year growth in sales per share, as provided by FactSet Research Systems, Inc. Trailing year-over-year growth is the percentage change in sales per-share for the trailing 12 months versus the sales per-share from the prior 12 months. Sales per-share is the trailing 12 months of sales from the most recent trailing quarterly or semi-annual filings, whichever is most current, divided by the end of period reported count of common shares outstanding used to calculate basic earnings per share. Trailing year-over-year growth is the percentage change in sales per-share for the trailing 12 months versus the sales per-share from the prior 12 months. Sales per-share is the trailing 12 months of sales from the most recent trailing quarterly or semi-annual filings, whichever is most current, divided by the end of period reported count of common shares outstanding used to calculate basic earnings per share.
Each financial metric will create a separate score so that every company will have three scores. These three scores are averaged together to create one composite score for a company. This composite score is used to rank the companies in the next step in order to determine the sub-universe of securities.
3. Define Sub-Universe: Reduce the initial universe of securities to a sub-universe that meets the following requirements, with each requirement being applied independently to the initial universe from the other requirements in this step, as of the Security Selection Date:
• Exclude the lowest ranked 25% of securities from the initial universe determined by the average of the three financial rankings described in step 2.
• Exclude the 20% of the initial universe with the lowest trailing six month total return.
• Exclude securities not listed on a public securities exchange located in one of the following countries: Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Greece, Hong Kong, Ireland, Israel, Italy, Japan, Mexico, the Netherlands, New Zealand, Norway, the Philippines, Singapore, South Africa, Spain, Sri Lanka, Sweden, Switzerland, the United Kingdom and the United States.
• Exclude securities that have a pending cash or stock merger and acquisition or bankruptcy which will lead to delisting the security from the qualifying exchanges above. Such events will be determined by reviewing the announced merger and acquisition data from Bloomberg and if the announced date falls before the Security Selection Date, an announcement of an agreement to be acquired in whole for cash or stock from an acquiring company or bankruptcy filing will cause exclusion.
4. Selection: Select from the sub-universe the 30 top dividend yielding securities (based on the “indicated dividend yield” as provided by Bloomberg L.P. and with higher rank given to larger market capitalization when yields are equal) and equally weight these securities as of the Security Selection Date. Selected securities must adhere to following portfolio limits as of the Security Selection Date:
• Maximum 20% weight in any sector as of the Security Selection Date.
• Maximum one-third of the portfolio in small-capitalization companies, as defined by Russell, as of the Security Selection Date.
• Maximum two-thirds of the portfolio will consist of small-capitalization and mid-capitalization companies, as defined by Russell, as of the Security Selection Date.
• Maximum 40% weight in any one geographic region as of the Security Selection Date. Geographic regions are based on a selected company’s country of headquarters and are defined as follows: Africa, Australasia, Eastern Europe, Far East Asia, Latin America, Middle East, North America, South Asia and Western Europe.
• Any country with more than one security in the Trust portfolio is limited to a portfolio weight that cannot exceed the lesser of +10% or 10 times its relative share of market capitalization amongst all emerging market countries (where “market capitalization” for each country is determined at the most recent year-end by the sum of equity market capitalization of each company headquartered in that country per FactSet. The equity market capitalization for each company is determined by the total outstanding common equity share count multiplied by the closing price in USD, with currency exchange rates provided by WM/Reuters when share price is non-U.S. dollar denominated). For example, if Country A has a 9.0% share of market capitalization amongst all emerging market countries, then the portfolio weight limit for securities from Country A would be 19%, which is the lesser of 19% and 90%. This would limit the portfolio to a maximum of five securities from Country A since each position is 3.33% weight. On the other hand, if Country B has a 0.7% share of market capitalization amongst all emerging market countries, then the portfolio weight limit for securities from Country B would be 7%, which is the lesser of 10.7% and 7%. This would limit the portfolio to a maximum of two securities from Country B since each position is 3.33% weight.
• Maximum of 25% of the Trust portfolio in securities traded on a non-U.S. public securities exchange.
Once an investment limitation has been reached, additional securities of that type will not be included in the Trust and the next highest yielding security will be used.
Please note that due to the fluctuating nature of security prices, the weighting of an individual security or sector in the Trust portfolio may change after the Security Selection Date.
Risks and Other Considerations
As with all investments, you may lose some or all of your investment in the Trust. No assurance can be given that the Trust’s investment objective will be achieved. The Trust also might not perform as well as you expect. This can happen for reasons such as these:
• Securities prices can be volatile. The value of your investment may fall over time. Market value fluctuates in response to various factors. These can include stock market movements, purchases or sales of securities by the Trust, government policies, litigation, and changes in interest rates, inflation, the financial condition of the securities’ issuer or even perceptions of the issuer. Units of the Trust are not deposits of any bank and are not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency.
• Securities selected according to this strategy may not perform as intended. The Trust is exposed to additional risk due to its policy of investing in accordance with an investment strategy. Although the Trust’s investment strategy is designed to achieve the Trust’s investment objective, the strategy may not prove to be successful. The investment decisions may not produce the intended results and there is no guarantee that the investment objective will be achieved.
• The Trust is concentrated in securities issued by Asian companies. As a result, political, economic or social developments in Asia may have a significant impact on the securities included in the Trust. Certain Asian economies have experienced rapid growth and industrialization, while other Asian economies have experienced high inflation, high unemployment, currency devaluations and restrictions, and over-extension of credit. Many Asian countries are subject to political risk, including political instability, corruption and regional conflict with neighboring countries. In addition, many Asian countries are subject to social and labor risks associated with demands for improved political, economic and social conditions.
• The Trust invests in ADRs, a GDR and foreign securities listed on a foreign exchange. The Trust’s investment in ADRs, a GDR and foreign securities listed on a foreign exchange presents additional risk. ADRs and GDRs are issued by a bank or Trust company to evidence ownership of underlying securities issued by foreign corporations. Securities of foreign issuers present risks beyond those of domestic securities. More specifically, foreign risk is the risk that foreign securities will be more volatile than U.S. securities due to such factors as adverse economic, currency, political, social or regulatory developments in a country, including government seizure of assets, excessive taxation, limitations on the use or transfer of assets, the lack of liquidity or regulatory controls with respect to certain industries or differing legal and/or accounting standards.
• The Trust includes securities issued by companies headquartered in countries considered to be emerging markets. Emerging markets are generally defined as countries with low per capita income in the initial stages of their industrialization cycles. Risks of investing in developing or emerging countries include the possibility of investment and trading limitations, liquidity concerns, delays and disruptions in settlement transactions, political uncertainties and dependence on international trade and development assistance. Companies headquartered in emerging market countries may be exposed to greater volatility and market risk.
• The Trust includes securities whose value may be dependent on currency exchange rates. The U.S. dollar value of these securities may vary with fluctuations in foreign exchange rates. Most foreign currencies have fluctuated widely in value against the U.S. dollar for various economic and political reasons such as the activity level of large international commercial banks, various central banks, speculators, hedge funds and other buyers and sellers of foreign currencies.
• The Trust invests in securities issued by small-capitalization and mid-capitalization companies. These securities customarily involve more investment risk than securities of large-capitalization companies. Small-capitalization and mid-capitalization companies may have limited product lines, markets or financial resources and may be more vulnerable to adverse general market or economic developments.
• Share prices or dividend rates on the securities in the Trust may decline during the life of the Trust. There is no guarantee that share prices of the securities in the Trust will not decline and that the issuers of the securities will declare dividends in the future and, if declared, whether they will remain at current levels or increase over time.
• Inflation may lead to a decrease in the value of assets or income from investments.
• The Sponsor does not actively manage the portfolio. The Trust will generally hold, and may, when creating additional units, continue to buy, the same securities even though a security’s outlook, market value or yield may have changed.
See “Investment Risks” in Part A of the prospectus and “Risk Factors” in Part B of the prospectus for additional information.
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 investment management business of Guggenheim Partners, LLC ("Guggenheim"), which includes Security Investors, LLC ("SI"), Guggenheim Funds Investments Advisors, LLC ("GFIA") and Guggenheim Partners Investment Management ("GPIM") the investment advisors to the referenced funds.
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• Not FDIC Insured • No Bank Guarantee • May Lose Value
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