AN ALL CAP TACTICAL STRATEGY UTILIZING
YIELD AS AN OBJECTIVE VALUATION MEASURE


Earnings and valuation metrics, in general, can be subjective and difficult to forecast. Using the Day Hagan Logix 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

THE PROCESS

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

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EXECUTIVE TEAM

DONALD L. HAGAN, CFA

Don began his career in 1988 with Ned Davis Research and became Chief Sector Analyst and editor of several publications. He was then named Director of Research and Portfolio Manager for SCI Capital Management in 1996. SCI was acquired by Wells Fargo in 2001, and Don became a member of the Wells Fargo PCS National Investment Management Committee. He has been a CFA charter holder since 1994.

arthur day

Art’s career began in 1984 with Dean Witter Reynolds. In 1987, he joined E.F. Hutton /Shearson Lehman Brothers, and in 1993 joined PaineWebber/UBS as First Vice President of Investments. In 1999, Art began his association with Engagement Systems as an investor and owner. Art contributed to the company’s development of their “Skill Weighted Portfolio Methodology” which emphasized index funds and ETFs due to their inherent market efficiencies.

robert herman

Former President of Logix Investment Management (now a division of Gries Financial) and a lead equity analyst for Goldman Sachs Global Investment Research. Rob also worked as an engagement leader for strategy consultancy Monitor Company and earlier in his career as a Congressional Communications Director. He sits on the Executive and Investment Committees of Gries Financial.

JEFFREY PALMER

Jeff Palmer is Co-Portfolio Manager of Logix and sits on the Executive Committee of Gries Financial. He is also a member of the Gries Financial Investment Committee. Jeff was a successful entrepreneur before joining Gries Financial in 1989, and served as an equity analyst and portfolio manager at the firm for several years. In addition, he is Gries Financial's Chief Compliance Officer. 


Donald L. Hagan, LLC dba Day Hagan Asset Management has engaged the services of DH Logix, LLC as a sub-advisor for the purpose of determining the purchase and sale of securities for the Day Hagan Logix Tactical Dividend Strategy.

All investment strategies have the potential for profit or loss. 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. There is no assurance that the strategy will achieve its investment objectives. Increased portfolio turnover may result in higher brokerage commissions, dealer mark-ups and other transaction costs and may result in taxable capital gains. Past performance is no guarantee of future results.