Innovative Portfolios: Happy 10th Birthday, Bulls of the Dow!

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Jun 15, 2023, 11:00 ET

Indianapolis Registered Investment Advisory Firm

INDIANAPOLIS, June 15, 2023 /PRNewswire/ -- Innovative Portfolios marks the 10^th birthday of their portfolio strategy, Bulls of the Dow, designed to seek capital appreciation in a portfolio of 10 individual stocks selected from the Dow Jones Industrial Average.

Innovative Portfolios | Bulls of the Dow Performance as of 3/31/23

Innovative Portfolios Managing Director and Chief Investment Officer Dave Gilreath came up with the Bulls of the Dow concept 10 years ago while reflecting on the Dogs of the Dow strategy during a shower. Dogs of the Dow—popular in the 80s and 90s—saw investors buy the 10 Dow stocks with the highest dividend yields, typically indicating that the stocks were lower performers of the market. Dave wondered what would happen if he purchased stocks with high performance instead—and, additionally, the 10 Dow stocks with the lowest downside risk at the time of purchase (based on quantitative data from Revelation Investment Research). And thus, Bulls of the Dow was born.

Innovative Portfolio's Bulls of the Dow strategy takes the 30 companies that comprise the Dow Jones Industrial Average (DJIA) and assesses their fundamental strengths. Then, using Revelation Investment Research to screen for downside risk, Innovative Portfolios then buys the 10 companies identified as fundamentally strongest which also have the lowest downside risk at the time of purchase. Every quarter, the team rebalances the portfolio, taking out a few stocks and replacing them based on the updated screening evaluation. This results in a dynamic portfolio that continuously seeks out some of the strongest DJIA stocks, and Gilreath is proud of the results.

Bulls of the Dow's annualized 10-year return came in at 13.02% gross and 11.64% net of fees, while the Dow Jones Industrial Average Index returned 11.15% over that same time period. "It can be tough to beat the benchmark over any given year, let alone over a 10-year period," says Gilreath.

With results like these, Innovative Portfolios doesn't plan on changing their recipe for Bulls of the Dow anytime soon. "After 10 years," Gilreath says, "it's still doing exactly what we designed it to do."

About Innovative Portfolios, LLC:

Based in Indianapolis, Indiana, Innovative Portfolios provides strategic investment solutions to RIAs and institutional clients, with sales team members located throughout the United States. As of 3/31/2023, AUM for the firm and its affiliates totaled $1.51 billion. Innovative Portfolios Principal Dave Gilreath is a contributor of investment commentary to CNBC.com, ThinkAdvisor, Medical Economics, and FA Financial Advisor. Visit innovativeportfolios.com for more information.

Disclosure:

The Bulls of the Dow Composite includes portfolios that invest in our model of ten fundamentally strong stocks in the Dow Jones Industrial Average Index (DJIA). Positions are large capitalization U.S. stocks and portfolios are rebalanced quarterly. The investment objective of the composite is capital appreciation and dividend income. The Bulls of the Dow composite consists of fully discretionary portfolios, including those accounts no longer with the firm. The composite excludes portfolios under $25,000. For comparison purposes the composite is measured against the DJIA. The Composite was created on January 1, 2021 and the inception date is February 1, 2013.

IP acquired the composite through a subadvisor agreement with Sheaff Brock Investment Advisors, LLC (SBIA), wholly owned by SBCM, in December 2020. Performance prior to January 1, 2021 occurred while the investment management team was affiliated with SBIA. The same investment management team has managed the composite since its inception, and the investment process has not changed. Performance prior to January 1, 2021 is linked to performance earned at SBIA.

Performance presented are time-weighted returns. Valuations and performance is reported in U.S. dollars. Composite performance is presented on gross-of-fees and net-of-fees basis and includes the reinvestment of income (dividends/interest). Gross-of-fees returns are presented before management and custodial fees but after all trading expenses. Net-of-fees returns are calculated by deducting a model management fee of 0.3125, ¼ of the highest annual management fee of 1.25%, from the quarterly gross composite return, applied the first month of each quarter. Actual advisory fees incurred by clients may vary. Policies for valuing investments, calculating performance, and preparing GIPS® reports are available upon request.

The benchmark is the Dow Jones Industrial Average Index (DJIA), a price-weighted average of 30 significant stocks traded on the New York Stock Exchange and the NASDAQ. An index should only be compared with a mandate that has a similar investment objective. An index is not available for direct investment and does not reflect any of the costs associated with buying and selling individual securities or management fees, the incurrence of which would have the effect of decreasing historical performance results. There can be no assurances that a composite will match or outperform any particular benchmark.

Past performance is no guarantee of future performance and there is a risk of loss of all or part of your investment. Individual client performance returns may be different than the composite returns listed. 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. Information is obtained from sources IP believes are reliable, however, IP does not audit, verify, or guarantee the accuracy or completeness of any material contained herein.

Certain information expressed represents an assessment at a specific point in time and is not intended to be a forecast or guarantee of future performance, nor is it intended to speak to any future time periods. The information and data in the composite overview does not constitute legal, tax, accounting, investment, or other professional advice. The information provided in the composite overview should not be considered a recommendation to purchase or sell any particular security. There is no assurance that any securities discussed herein will remain in the composite at the time you receive the composite overview or that securities sold have not been repurchased. The securities discussed may not represent the entire portfolio. It should not be assumed that any securities transaction or holding discussed was or will prove to be profitable, or that the investment recommendations or decisions in the future will be profitable or will equal the investment performance of the securities discussed herein.

SOURCE Innovative Portfolios