Earnings and valuation metrics, in general, can be subjective and difficult to forecast. Using the Day Hagan Tactical Dividend process, dividend yield becomes an objective, controlled means of valuation. The goal of the fund is to begin by identifying attractive U.S. industries, and then identifying the attractive companies within them.”

— Robert Herman, Portfolio Manager


Identify Attractive Industries

  • The proprietary process begins by screening the Russell 3000 for companies with a 10-year history of uncut dividends, balance sheet sustainability, cash flow generation and fundamental soundness.
  • Typically, approximately 400 names emerge for the next stage of analysis.
  • The screened group of buy candidates are then re-classified into proprietary industry groups based on business lines and revenue sources.
  • Once the industry groups are defined, there must be a minimum of four candidates within an industry for that industry (and the underlying names) to be included in the next stage of analysis.
  • Further, the newly formed industry’s composite dividend yield must be near the high yield buy threshold that we have calculated for each industry.
  • Industries passing the evaluation are defined as potentially being at or near the lows of their current price cycles — and the companies within these industries are considered buy candidate finalists.

We believe it is vitally important to only invest in those industries with a broad-based, large number of attractively rated constituents. Our view is that historically, this has proven to reveal industries benefiting from a broader-based positive fundamental change in that industry’s operating environment. Within the portfolio, assets and position sizes are allocated based on a weight-of-the-evidence approach, while tactical changes in the portfolio are made to reflect prevailing financial conditions within industries and sectors. When suitable buy candidates are not available, cash is utilized as a defensive measure.

The portfolio is constructed upon a foundation of time-tested factors which have historically pinpointed industries and companies that are attractively priced, shareholder-friendly, fundamentally sound and exhibiting balance sheet strength. When suitable buy candidates are not available based on the strategy’s criteria, cash is utilized as a defensive measure.”

— Jeffrey Palmer, Portfolio Manager

Furthermore, the strategy employs a multi-faceted sell discipline which includes the on-going evaluation of fundamental and technical measures.

The Day Hagan Tactical Dividend Strategy doesn’t try to replicate a fixed benchmark. Instead, as a function of the rigorous analysis of industries and the companies within them, the portfolio continually moves towards areas evidencing attractive prices and fundamental soundness – whether those areas are in large-cap, small-cap, value or growth. We focus only on the highest probability of success.”

— Donald L. Hagan, CFA, Portfolio Manager

The data and analysis contained herein are provided “as is” and without warranty of any kind, either expressed or implied. Day Hagan Asset Management (DHAM), any of its affiliates or employees, or any third party data provider, shall not have any liability for any loss sustained by anyone who has relied on the information contained in any Day Hagan Asset Management literature or marketing materials. All opinions expressed herein are subject to change without notice, and you should always obtain current information and perform due diligence before investing. DHAM, accounts that DHAM or its affiliated companies manage, or their respective shareholders, directors, officers and/or employees, may have long or short positions in the securities discussed herein and may purchase or sell such securities without notice. DHAM uses and has historically used various methods to evaluate investments which, at times, produce contradictory recommendations with respect to the same securities. When evaluating the results of prior DHAM recommendations or DHAM performance rankings, one should also consider that DHAM may modify the methods it uses to evaluate investment opportunities from time to time, that model results do not impute or show the compounded adverse effect of transactions costs or management fees or reflect actual investment results, that some model results do not reflect actual historical recommendations, and that investment models are necessarily constructed with the benefit  of hindsight. For this and for many other reasons, the performance of DHAM’s past recommendations and model results are not a guarantee of future results. The securities mentioned in this document may not be eligible for sale in some states or countries, nor be suitable for all types of investors; their value and income they produce may fluctuate and/or be adversely affected by exchange rates, interest rates or other factors.

Donald L. Hagan, LLC dba Day Hagan Asset Management has engaged the services of Gries Financial, LLC as a sub-advisor for the purpose of determining the purchase and sale of securities for the Day Hagan Tactical Dividend Strategy. 1 The Gross Returns performance information provided is for the Gries Financial, LLC Logix Industry Relative Yield Strategy separately managed accounts. Actual fees may vary based on, among other factors, account size and custodial relationship. The results portrayed reflect the reinvestment of dividends, interest and other earnings. Past performance does not guarantee future results. No current or prospective client should assume future performance of any specific investment or strategy will be profitable or equal to past performance levels. All investment strategies have the potential for profit or loss. Changes in investment strategies, contributions or withdrawals, and economic conditions may materially alter the performance of your portfolio. Different types of investments involve varying degrees of risk, and there can be no assurance that any specific investment or strategy will be suitable or profitable for a client’s portfolio. Historical performance results for investment indexes and/or categories, generally do not reflect the deduction of transaction and/or custodial charges or the deduction of an investment management fee, the incurrence of which would have the effect of decreasing historical performance results. There can be no assurances that a portfolio will match or outperform any particular benchmark.

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