RiverFront Strategas Policy Opportunities Portfolio / RSPO

Investment Objective

Seeks to outperform the S&P 500 by investing in companies closely tied to public policy developments, namely through their lobbying activity in Washington D.C.

Implementation

Stocks

Benchmark

100% S&P 500

Time Horizon

5-7 years

EQUITY SOLUTION

Portfolio Objective

The RiverFront Strategas Policy Opportunities Portfolio seeks to outperform the S&P 500 by investing in companies closely tied to public policy developments, namely through their lobbying activity in Washington D.C. The strategy is constructed on the idea that the market cannot, and investors have not historically shown the ability to, properly value the earnings benefit generated from companies’ lobbying activities and their political influence. Regardless of which party controls the White House or Congress, the portfolio is designed to uncover companies where there is a perceived mispricing on their earnings benefit that comes from corporate lobbying.

INVESTOR OUTCOME

Accumulate ~ More Aggressive

Goal: Build
Outcome: Growth

An important and under-appreciated component of future earnings growth is a company’s ability to navigate government policy, in our view. The RiverFront Strategas Policy Opportunity Portfolio is a concentrated US equity portfolio comprised of S&P 500 companies with the greatest ‘lobbying intensity(1)’, a proprietary measure. The portfolio is designed to be fully invested at all times.

Investment Philosophy

Based off of the Policy Opportunities Portfolio model, provided by Strategas Asset Management, the RiverFront Policy Opportunities Portfolio identifies large-cap U.S. companies with the highest lobbying strength based on the aggregate amount of dollars spent on lobbying activities by that company relative to the size of the company measured by reference to several fundamental factors (reported in quarterly corporate filings) and market factors (market capitalization, liquidity).

About Strategas Asset Management

The portfolio is based on the Policy Opportunities Portfolio model provided by Strategas Asset Management (“SAM”). Founded in 2014, Strategas Asset Management is a macro thematic investment manager. SAM leverages “top-down” research and quantitative security selection to offer a suite of thematic and tactical investment strategies. SAM, which operates independently, is wholly owned by Baird Financial Corporation and as a result, is an affiliate of RiverFront Investment Group. Dan Clifton is the lead portfolio manager for the model on which the portfolio is based.

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