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ALTRIUS CAPITAL MANAGEMENT, INC. | TOLL FREE 855-ALTRIUS | WWW.ALTRIUSCAPITAL.COM
Disciplined Alpha Dividend Income Strategy1st Quarter 2020
Q1 20202
Altrius HighlightsFIRM OVERVIEW
Altrius Capital Management, Inc. was founded in 1997
Altrius is 100% employee owned
Altrius is an SEC registered investment advisor
Having managed client assets for over two decades, Altrius claims compliance with Global Investment Performance Standards (GIPS®)
Altrius maintains a +17 year track record in the following strategies: Global Income, Disciplined Alpha Dividend Income and Unconstrained Fixed Income Data as of 03.31.2020
AUM by Product
Disciplined AlphaDividend Income
International ADRDividend Income
Unconstrained FixedIncome
Cash
The Firm currently manages approximately $278mm in assets by offering separately managed account solutions
Chart1
Disciplined Alpha Dividend Income
International ADR Dividend Income
Unconstrained Fixed Income
Unconstrained Fixed Income
Cash
AUM by Product
AUM by Product
33.1
17.5
0
42.4
7.1
Sheet1
AUM by Product
Disciplined Alpha Dividend Income33.1
International ADR Dividend Income17.5
Unconstrained Fixed Income0
Unconstrained Fixed Income42.4
Cash7.1
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100.1
Q1 2020
GIPS VerificationACA Verification Services
ComplianceDzuira Compliance Services
TradingMoxy / Advent
AccountingBaccheta & Company
3
Altrius Organization
MANAGEMENT TEAM
INVESTMENT COMMITTEE
OPERATIONS
FIRM OVERVIEW
Zachary Q. Smith, CFAPortfolio Manager
Robert A. D’Angelo, CFAExecutive Vice President
Christopher C. Rolf, CFAExecutive Vice President
James M. RussoChief Investment Strategist
Andrea L. AitkenChief Compliance Officer
Rebecca A. HarmonTrader
Joy G. WoodsDirector of Client Service
Rita A. Hendrick-SmithChief Operations Officer
Lauren TaylorOperations Analyst
Gregory D. Kammerer, J.D.Executive Vice President
Q1 20204
Top down economics drive market cycles, market segments, and ultimately individual security prices.
Total return matters, which includes sources of returns often overlooked by investment managers and investors, such as dividends.
Value is critical; the market will reward the intrinsic value inherent in a security over time.
GLOBAL MACRODRIVES OUR
INVESTMENT ANALYSIS
TOTAL RETURN DRIVES OUR
PORTFOLIO CONSTRUCTION
VALUE DEFINES OUR
SECURITY SELECTION
Different by DesignPHILOSOPHY
Q1 20205
Income is our focus; we employ a flexible investment strategy seeking high,current income and long term capital growth by investing in stocks, bonds andalternative investments such as commodities, MLPs, REITs and preferred issues.
Global macro conditions are the basis for investing; top down economicsdrive market cycles, market segments, and ultimately individual security prices.The strategy retains asset class and sector flexibility to unearth uniqueopportunities.
Value is critical; we will not pay more for a security than we believe it is worth,with full confidence that the market will reward the intrinsic value inherent inthe security over time.
Patience is vital; we do not make extreme short term changes in response tofleeting market events, we invest for the long term and believe returns are drivenby consistency of process.
Risk management is required to ensure long term preservation of capital.
Investment PhilosophyPHILOSOPHY
Q1 20206
At Altrius, we believe that global asset allocation valuations matter. Predicated on this belief, we maintaina series of three economic scenarios under which the economy may fall at any one time. By analyzing thevaluations inherent in the current economic scenario, we are better positioned to identify securities at thesector, industry and individual company level that are best positioned to add significant value to ourportfolio over time.
Source: Advisor Intelligence and Altrius Capital
Economic Scenario AnalysisPHILOSOPHY
ECONOMIC SCENARIOS
Bear Base BullS&P 500 at 2585, Bloomberg Barclays U.S. Aggregate Bond Index yield at 1.71%, MSCI Europe Index at 1342 , ICE BofA ML High Yield Cash Pay Index at 9.17%.
Equities Estimate Estimate Estimate
U.S. Equities -3.2% 6.2% 12.8%
Developed Int’l – Europe -3.4% 14.0% 21.2%
REITs -1.6% 5.2% 8.3%
Fixed Income
Investment-Grade Bonds 1.8% 1.3% 0.9%
High-Yield Bonds 4.2% 5.8% 7.6%
TIPS 1.0% 0.5% -0.9%
*Our likely scenario
Q1 2020
Demographic trends and geographic demand are derivatives of global economic growth and serve as drivers for enterprise.
Global Current and Potential Consumption Trends
Source: © 2013 The World Bank: World Development Indicators: United Nations, World Population Prospects; World HealthOrganization, National Health Account database supplemented by country data; and International Energy Agency. As of 2011 (based onmost recent data available, 2010–2011). Health expenditure (US$), electric power consumption (kwh), and energy use (kg of oilequivalent) percentages were calculated by establishing a baseline expenditure/consumption amount of $9,000, 15,000 kWh, and 8,000kg, respectively, and then measuring actual consumption per capita against the baseline.
United States Brazil India China
PotentialCurrent
7
Why Global MattersPHILOSOPHY
Q1 2020
Sources: Data represented is as of company’s latest 10-K filing for the period ending 12.31.2019 (*Fiscal year ends9.30.2019 for Apple; ** fiscal year ends 06.30.2019 for Procter & Gamble). Foreign Revenue is based on Total Revenue –Domestic Revenue. Logos are trademarks of their respective owners and are used for illustrative purposes and should notbe construed as an endorsement or sponsorship of Altrius.
78%
Are domestic companies really domestic anymore? While a company may be headquartered in the United States, investing requires understanding the drivers of a company’s bottom line.
8
A Sampling of Major US Brands with Foreign Revenues Above 50% of Total Revenues
63% 60%* 58%**
57% 57% 54% 50%
Why Global MattersPHILOSOPHY
Q1 2020
726.65%
601.43%
More Global Less GlobalSource: © 2014 Ned Davis Research, Inc.
Comparison of S&P 500 Companies’ Returns Cumulative Total Return for the 20-Year Period Ended 06.30.2014
“More Global” represents S&P 500
companies with reported pre-tax income of more than 50% from
foreign operations.
“Less Global” represents S&P 500
companies with reported pre-tax income of less than 50% from
foreign operations.
9
125 percentage points
Why Global MattersPHILOSOPHY
Q1 202010
Source: Based on Schwert (1990) data for 1801–1870, a blend of Schwert and Siegel (2002)data for 1871–1925, and S&P 500 Index data since 1926.
Over long time periods dividends have made up a large proportion of total returns.
200 Year US Equity Return Decomposition
Why Dividends MatterPHILOSOPHY
Q1 202011
Source: Federated Advisors
Since Altrius’ inception in 1997, the Firm has been committed to dividend growth, viewing dividends as a critical component of total return.
Why Dividends MatterPHILOSOPHY
PERCEPTION
Dividends4.2%
Capital Appreciation
5.6%
DividendYield4.2%
DividendGrowth
4.4%
ValuationChanges
1.2%
REALITY
Chart1
Dividends
Capital Appreciation
Column1
0.042
0.056
Sheet1
Column1
Dividends4%
Capital Appreciation5.60%
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Valuation Changes
Dividend Yield
Dividend Growth
Column1
0.012
0.042
0.044
Sheet1
Column1
Valuation Changes1.20%
Dividend Yield4.20%
Dividend Growth4.40%
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Q1 202012
Lower Risk Higher Risk
Low
er R
etur
nH
ighe
r Ret
urn
Dividend Payers Risk/Reward01.31.1972 to 12.31.2016
Source: © 2017 Ned Davis Research, Inc. Non-dividend-paying Stocks represents non-dividend-paying stocks of the S&P 500Index; Dividend Payers w/ No Change represents all dividend-paying stocks of the S&P 500 Index that maintained their existingdividend rate and reflects the reinvestment of all income. The S&P 500 Geometric Equal-Weighted Total Return Index is calculatedusing monthly equal-weighted geometric averages of the total returns of all dividend-paying stocks and non-dividend-paying stocks.
Dividend Cutters or Eliminators
Non-dividend-paying Stocks
Dividend Payers w/ No Change
Dividend Growers & Initiators
-3%
0%
3%
6%
9%
12%
10% 15% 20% 25% 30%
Ave
rage
Ann
ualiz
ed T
otal
Ret
urn
Annualized Standard Deviation
Why Dividends MatterPHILOSOPHY
Q1 202013
*Source: Siegel, Jeremy, Future for Investors (2005), with updates through 20171 “What do dividends tell us about earnings quality,” Douglas Skinner, Chicago Booth School of Business
Agency Dilemma
Dividends help reduce problems arising from asymmetric information and conflicts of interest between investors and company
management.
Management(Agent)
Investor(Principal)
Signaling
Company management makes decisions about dividend policies using internal
forecasts; a stable and rising dividend can signal superior future return potential.
Dividend Stocks by Quintile vs. S&P 500Growth of $1,000*
ReliabilityEarnings & cash flows can be manipulated while dividends are a more certain measure
of the return-generating capacity of a business model; academic research has
found that dividends provide information about the quality of earnings.1
Why Dividends MatterPHILOSOPHY
Q1 202014
In low interest rate environments, investors substitute toward dividend-paying stocks, resulting in higher multiples for higher payout ratios.
Source: “What if the Market is Revaluing Dividends,” Fidelity Asset Management, March 2012
Multiples At Different Payout Ratios Multiples on Distributed Versus Undistributed Earnings
Why Dividends MatterPHILOSOPHY
Q1 2020Source: Siegel, Jeremy, Future for Investors (2005), with updates through 2017
Growth of $1000: Cumulative Returns by P/E Ratio 1957-2017
Why Value Matters
15
PHILOSOPHY
Each stock in the S&P 500 is ranked from lowest to highest by price to earnings ratio on December 31st of every yearand placed into “quintiles” (baskets of 100 stocks). The stocks in each quintile are weighted by their marketcapitalization. The price/earnings ratio is defined as each stock’s price as of December 31st of that year divided by itsnet income per share. Past performance does not guarantee future results.
Q1 2020
40
50
60
70
80
90
100
110
120
16
Source: University of Michigan, FTSE Russell.*The Russell 3000 is a total market index, which assumes all cash distributions are reinvested. Peak is defined as highest index value beforea series of lower lows, while trough is defined as lowest index value before a series of higher highs. Shaded areas indicate US recessions.
At Altrius, we often view crisis as an opportunity and invest when others won’t, allowing us to capitalize on potential upside performance.
Why Value MattersPHILOSOPHY
Stock Returns During Periods of Uncertainty
May 1980:+32.0%
Jan. 2000:-4.5%
Mar. 2003:+38.1% Oct. 2005:
+16.5%
Jan 2004:+6.4%
Nov. 2008:+28.4%
Jan 2007:-2.2%
Oct. 1990:+33.9%
Mar. 1984:+19.6%
Aug. 2011:+20.0%
Sentiment cycle peak and subsequent 1-yr Russell 3000* return
Sentiment cycle trough and subsequent 1-yr Russell 3000 return
Jan 2015:-4.8%
Con
sum
er S
entim
ent I
ndex
Q1 202017
Contrary to CAPM efficient market claims, high risk is often not associated with high reward.
Empirical Returns by Volatility QuintileVa
lue
of $
1 In
vest
ed in
196
8
Source: Benchmarks as Limits to Arbitrage: Understanding the LowVolatility Anomaly; Financial Analyst Journal Volume 67, 2011
The Value of Risk-Adjusted ReturnsPHILOSOPHY
Q1 202018
A process designed to outperform driven by total return:
GLOBAL MACRO TOP DOWN PERSPECTIVE
DRIVES INITIAL UNIVERSE
Top down strategy employed to identify the most compelling geographic, industry
and/or sector set:
National GDP Growth
Demographics- Where is the Growth?
Durable Businesses Exploiting Growth
Demand Changes: What’s growing, moving, slowing?
Bottom up process seeks to identify companies selling below their
intrinsic value:
Seek high-yielding, durable businesses
Screen P/E ratio, the ‘real’ earnings of a company
Seeking companies generally selling for
Q1 202019
CLASSIC VALUE30-50%
PERSISTENT EARNERS30-50%
Well-established companies with dependable revenue growth, reliable earnings and healthy
dividend appreciation, priced below their historical valuations.
Persistent Earners: PepsiCo, Procter & Gamble
Financially sound companies selling at economical valuations relative to their earnings power which demonstrate a commitment to sound, above average
dividends over the long term.Classic Value: Pfizer, JPMorgan
Companies that sell at significant discounts to their intrinsic value due to market
inefficiencies driven by irrational sell-offs.Distressed/Contrarian: Hanesbrands, B&G Foods
DISTRESSED/CONTRARIAN0-15%
Further fundamental analysis is designed to determine which companies are increasing top line revenue growth, earnings and dividend payments. We target a portfolio of 30-50 companies that
fall into three value categories: Distressed/Contrarian, Classic Value and Persistent Earners.
Altrius Investment ProcessPROCESS
Chart1
Contrarian Distressed
Classic Value
Persistent Earners
Security Allocation
20
40
40
Sheet1
Security Allocation
Contrarian Distressed20
Classic Value40
Persistent Earners40
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Q1 202020
What Smart Beta Means to Us
Since 1997, we have employed a “smart beta” active management process characterized by three aspects of portfolio management which we believe lead to potentially superior risk-adjusted returns.
We craft our portfolios based on three “factors” – macro outlook, value, and dividends– which we believe are crucial in generating total return. We don’t attempt to follow anindex, but rather tactically position ourselves where we see opportunity.
Portfolio Selection
Equal Weighting
Contrarian Rebalancing
Our portfolio holdings are weighted equally in order to diversify adequately andprevent a small number of securities from driving portfolio performance.
We employ a process of contrarian rebalancing on a conditional basis to bring holdingsback to equal weights. When deemed necessary, we trim positions that have grown invalue and use proceeds to purchase those which have declined without a deteriorationof fundamental growth potential.
PROCESS
Q1 202021
At Altrius we employ a structured risk management perspective throughout oursecurity selection, monitoring, and sell process. By maintaining a data driven, factsoriented investment management process we avoid the bias that can often resultin poor risk management decisions.
As an added risk management component to our investment process, we create worstcase and best case scenarios for evaluating market opportunities and risk.
We do not hesitate to sell securities that we believe are ‘at risk’ based onfundamental factors; we remain agile and focused on our portfolio holdings at alltimes, prepared to sell securities that are not performing or for which we believe wehave identified better candidates to maximize portfolio return and to minimizeportfolio risk.
Companies that eliminate their dividend are almost always an automatic sell.
Valuations that exceed 20x earnings become too pricey and typically result in a sell.
Risk Management & Sell DisciplinePROCESS
Q1 202022
Benchmarks Morningstar US Value TR USD
Number of Holdings 25-50
Average Market Cap $30 - $70B
Minimum Market Cap $2B
Max Position Size 5%
Turnover 15 - 30%
Portfolio Construction GuidelinesPORTFOLIO ANALYTICS
Q1 202023
Sector Diversification
Disciplined Alpha Dividend Income Sector Allocation
PORTFOLIO ANALYTICS
Source: Morningstar
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Communication ServicesReal EstateBasic MaterialsTechnologyEnergyUtilitiesHealthcareConsumer CyclicalFinancial ServicesIndustrialsConsumer Defensive
Q1 202024
Sector Diversification
Disciplined Alpha Dividend Income Sector Allocation vs S&P 500
PORTFOLIO ANALYTICS
-40%
-30%
-20%
-10%
0%
10%
20%
30%
40%
Real Estate, -3%
Energy, -3%
Financial Services, -8%
Basic Materials, +4%
Utilities, -4%
Consumer Cyclical, +2%
Communication Services, -3%
Healthcare, +2%
Industrials, -2%
Technology, -9%
Consumer Defensive, +23%
Source: Morningstar
Q1 202025
Revenue by Geography
Global Revenue Generation
As of 03.31.2020Source: Morningstar
PORTFOLIO ANALYTICS
United States, 57.6%
Asia - Emerging, 11.1%
Eurozone, 10.0% Latin America, 3.6%
Japan, 3.5%
Asia - Developed, 3.0%
Canada, 2.8%
Europe - Emerging, 2.6%
United Kingdom, 2.4%
Middle East, 1.1%Europe - ex Euro,
1.0%Australasia, 0.9%
Africa, 0.4%
Other, 14.3%
Q1 202026
A History of Above Average DividendsPORTFOLIO ANALYTICS
Altrius Disciplined Alpha Dividend Income vs. S&P 500 Dividend Yield
Altrius has consistently delivered a higher dividend yield than the S&P 500 since inception.
Source: Morningstar
0.00%
1.00%
2.00%
3.00%
4.00%
5.00%
6.00% Altrius DA S&P 500
Q1 202027
Benchmark Morningstar US Value TR USD
Trailing P/E 15.06
Dividend Yield (TTM) 4.70%
Price/Book 2.49
Standard Deviation 10 YR: 13.95
Alpha (annualized) 10 YR: 1.82
Beta 10 YR: 0.95
Sharpe Ratio (annualized) 10 YR: 0.64
As of 03.31.2020
Portfolio Analytics
* 10 year statistics for the time period: 04.01.2010 to 03.31.2020
PORTFOLIO ANALYTICS
Q1 202028
Altrius Value PropositionPo
rtfo
lio V
alue
Ann
ual Y
ield
Disciplined Alpha Dividend Income Growth of $1,000,000 and Dividend Yield*
PERFORMANCE
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
$-
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
$3,000,000
$3,500,000
$4,000,000
$4,500,000
$5,000,000
Growth of $1,000,000 Portfolio Annual Yield
Iraq WarReal Estate Bubble
Financial Crisis
European Crisis
Oil Sell-off
COVID-19
*Portfolio Growth of $1,000,000 assumes reinvestment of alldividends since inception. All data represented is gross of fees.** Most recent trailing twelve month (TTM) Portfolio Annual Yieldis 4.70% for the period 03/31/2019 – 03/31/2020
**
Q1 202029
Altrius Value Proposition
Disciplined Alpha Dividend Income Growth of $1,000,000 and Dividend Income*
Port
folio
Val
ue
Ann
ual I
ncom
e
PERFORMANCE
*Portfolio Growth of $1,000,000 and Annual Income assumedividends reinvested since inception. All data represented is gross offees.
$0
$20,000
$40,000
$60,000
$80,000
$100,000
$120,000
$140,000
$160,000
$-
$500,000
$1,000,000
$1,500,000
$2,000,000
$2,500,000
$3,000,000
$3,500,000
$4,000,000
$4,500,000
$5,000,000
Growth of $1,000,000 Portfolio Annual Income
Iraq WarReal Estate Bubble
Financial Crisis
European Crisis
Oil Sell-off
COVID-19
Q1 202030
Altrius Tactical Positioning
*Portfolio Growth of $1,000,000 assumes reinvestment of all dividendssince inception. Time period represented is 2/12/2013 – 03/31/2020.All data represented is gross of fees.
PERFORMANCE
Altrius Disciplined Alpha Growth of $1,000,000* vs. Income Strategies
DADI, +78.89%
IUSV, +57.04%
IDU, +87.39%
IYR, +31.98%
BIZD, -17.17%
AMLP, -67.13%
XLP, +74.99%
$500,000
$750,000
$1,000,000
$1,250,000
$1,500,000
$1,750,000
$2,000,000
$2,250,000
$2,500,000DADI IUSV IDU XLP IYR BIZD AMLP
Strategy Ticker Value Cumulative ReturniShares US Utilities ETF IDU 1,873,908.90$ 87.39%Altrius Disciplined Alpha Income DADI 1,788,941.85$ 78.89%Consumer Staples Select Sector SPDR ETF XLP 1,749,885.02$ 74.99%iShares Core S&P US Value ETF IUSV 1,570,359.23$ 57.04%iShares US Real Estate ETF IYR 1,319,753.96$ 31.98%VanEck Vectors BDC Income ETF BIZD 828,259.25$ -17.17%Alerian MLP ETF AMLP 328,720.92$ -67.13%
Q1 202031
Portfolio Analytics:
-35.0%-30.0%-25.0%-20.0%-15.0%-10.0%-5.0%0.0%5.0%
10.0%15.0%
YTD03.31.2020
1 Year 3 Year 5 Year 10 Year 15 Year Since Inception01.01.2003
Altrius (Net) Altrius (Gross) Morningstar US Value TR USD
PERIOD YTD03.31.2020 1 YEAR 3 YEAR 5 YEAR 10 YEAR 15 YEARSince
Inception
Altrius (Net) (22.99) (15.63) 0.92 2.93 7.74 5.62 6.46
Altrius (Gross) (22.78) (14.73) 2.02 4.07 8.95 6.87 7.71
Morningstar US Value TR USD (28.43) (19.29) (2.67) 2.36 7.38 5.27 7.13
Disciplined Alpha Dividend Income
As of 03.31.2020
PERFORMANCE
Chart1
YTD 03.31.2020YTD 03.31.2020YTD 03.31.2020
1 Year1 Year1 Year
3 Year3 Year3 Year
5 Year5 Year5 Year
10 Year10 Year10 Year
15 Year15 Year15 Year
Since Inception 01.01.2003Since Inception 01.01.2003Since Inception 01.01.2003
Altrius (Net)
Altrius (Gross)
Morningstar US Value TR USD
-0.2299
-0.2278
-0.2843
-0.1563
-0.1473
-0.1929
0.0092
0.0202
-0.0267
0.0293
0.0407
0.0236
0.0774
0.0895
0.0738
0.0562
0.0687
0.0527
0.0646
0.0771
0.0713
Sheet1
Altrius (Net)Altrius (Gross)Morningstar US Value TR USD
YTD 03.31.2020-22.99%-22.78%-28.43%
1 Year-15.63%-14.73%-19.29%
3 Year0.92%2.02%-2.67%
5 Year2.93%4.07%2.36%
10 Year7.74%8.95%7.38%
15 Year5.62%6.87%5.27%
Since Inception 01.01.20036.46%7.71%7.13%
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Q1 202032
Altrius Disciplined Alpha Dividend Income Composite PerformanceDecember 31, 2008– December 31, 2019
YearGross
Return %
Net Return
%
BenchmarkReturn
%
Composite 3-Yr
St Dev %
Benchmark 3Yr
St Dev %
# of Portfolios
Composite Dispersion
%
TotalComposite
Assets
Percent ofFirm
Assets
2009 26.06 24.36 17.95 18.93 20.76 97 1.58 29,880,750 28.25
2010 14.25 12.95 16.65 20.91 22.74 103 0.35 40,704,238 34.08
2011 2.96 1.78 0.92 19.10 20.53 101 0.46 32,401,233 26.04
2012 10.97 9.69 14.19 14.80 14.80 105 0.39 39,979,598 29.62
2013 38.96 37.38 32.04 12.62 12.84 117 0.77 59,675,808 34.35
2014 11.06 9.82 9.75 10.07 9.40 128 0.46 56,308,054 29.75
2015 (3.52) (4.58) (2.16) 11.83 10.62 114 0.47 34,362,139 18.70
2016 17.06 15.72 20.79 12.34 10.25 133 0.90 46,328,213 17.35
2017 16.20 14.93 14.23 12.02 11.08 142 0.32 42,694,959 12.53
2018 (3.46) (4.53) (7.51) 11.49 11.21 148 0.50 41,141,380 12.39
2019 25.24 23.89 25.09 12.77 12.20 146 0.75 52,854,027 15.53
Composite OverviewPERFORMANCE
Q1 202033
ACCOUNT FORMAT SEPARATELY MANAGED ACCOUNT
INSTITUTIONAL ACCOUNT MINIMUM $1,000,000
MANAGEMENT FEE < $25M 55 BP
MANAGEMENT FEE > $25M 50 BP
Management Fee StructureFEE STRUCTURE
Q1 202034
Performance ReportingAltrius Capital Management, Inc. (Altrius) claims compliance with the Global Investment Performance Standards (GIPS®) and has preparedand presented this report in compliance with the GIPS standards. Altrius has been independently verified for the periods January 31, 2001 –December 31, 2018 by ACA Performance Service, LLC. The verification reports are available upon request. Verification assesses whether (1)the firm has complied with all the composite construction requirements of the GIPS standards on a firm-wide basis and (2) the firm’s policiesand procedures are designed to calculate and present performance in compliance with the GIPS standards. Verification does not ensure theaccuracy of any specific composite presentation.
The Firm is defined as Altrius Capital Management, Inc. (Altrius), a registered investment advisor with the Securities and ExchangeCommission. Altrius was founded in 1997 and manages equity, fixed income and balanced portfolios for high net worth individuals andfamilies.
Composite CharacteristicsThe Disciplined Alpha Dividend Strategy is a subaccount from the Altrius Global Income Composite. As of 06/30/16, the name of theDisciplined Alpha Dividend Strategy was changed from the U.S. Large Cap Dividend Income Strategy. The composite and subaccount werecreated in December 2010 with a performance inception date of December 31, 2002. The subaccount strategy seeks long term capitalappreciation and income by investing at least 80% of its assets in a diversified portfolio of income-producing equity securities paying higherthan average dividends. 30 – 50 U.S. positions are chosen from a universe of stocks with market capitalizations generally greater than $10billion.
Accounts are included on the last day of the month in which the account meets the composite definition. Accounts no longer undermanagement are withdrawn from the composite on the first day of the month in which they are no longer under management. Closedaccount data is included in the composite as mandated by the standards in order to eliminate a survivorship bias.
DisclosureDISCLOSURE
Q1 202035
BenchmarkThe benchmark is the Morningstar US Value TR USD. It was changed from the Russell 3000 Value Index as of 11/01/2019 and changed
retroactively for all periods. The change was made due to licensing fees being charged by the firms who own the indices. Effective 10/01/2017,the benchmark was changed from the Russell 1000 Value Index to the Russell 3000 Value index. The benchmark was changed to reflect thefact that this is an all-cap strategy that can hold small- and mid-cap companies as well as large-cap. The volatility of the indices may bematerially different from that of the performance composite. In addition, the composite’s holdings may differ significantly from the securitiesthat comprise the indices. The indices have not been selected to represent appropriate benchmarks to compare the composite’s performance,but rather are disclosed to allow for comparison of the composite’s performance to those of well-known and widely recognized indices.
Economic factors, market conditions, and investment strategies will affect the performance of any portfolio, and there are no assurancesthat it will match or outperform any particular benchmark.
Performance CalculationsValuations and returns are computed and stated in U.S. dollars. Results reflect the reinvestment of dividends and other earnings.Gross of fees return is net of transaction costs and gross of management and custodian fees. Net of fees returns are calculated using actual
management fees that were paid and are presented before custodial fees and but after management fees and all trading expenses. Returns canbe net or gross of withholding taxes, depending on how taxes are recorded at the custodian. Some accounts pay fees outside of their accounts;thus, we enter a non-cash transaction in the performance system such that we can calculate a net of fees return. Prior to 01/01/10, cash wasallocated to carve-out segments on a pro-rata basis based on beginning of period market values. Beginning 01/01/10, carve-out segments aremanaged separately with their own cash balance. Carve-out accounts represent 100% of composite assets for periods prior to 01/01/10.
The standard management fee for the Altrius Disciplined Alpha Dividend Strategy is 1.40% per annum on the first $500,000 USD, 1.00%per annum on the next $500,000 and 0.80% per annum thereafter. Additional information regarding Altrius Capital Management fees areincluded in its Part II Form ADV.
Internal dispersion is calculated using the asset-weighted standard deviation of all accounts included in the composite for the entire year; itis not presented for periods less than one year or when there were five or fewer portfolios in the composite for the entire year. The three-yearannualized standard deviation measures the variability of the composite and the benchmark (Morningstar US Value TR USD) returns over thepreceding 36-month period.
There are no non-fee paying accounts in our composites. When a security is purchased or sold, the principal amounts tied to thetransaction are net of trading costs; therefore the calculation and market values represent amounts net of trading costs. Dispersion is calculatedusing asset-weighted standard deviation, gross of fees. Policies for valuing portfolios, calculating performance, and preparing compliantpresentations are available upon request. A complete list and description of firm composites is available upon request.
DisclosureDISCLOSURE
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Past performance does not guarantee future results. The information provided in this material should not be considered an offer nor arecommendation to buy, sell or hold any particular security.
The Altrius Disciplined Alpha Dividend Income strategy is not sponsored, endorsed, sold or promoted by Morningstar, Inc. or any of itsaffiliates (all such entities, collectively, "Morningstar Entities"). The Morningstar Entities make no representation or warranty, express orimplied, to the owners of the Altrius Disciplined Alpha Dividend Income strategy or any member of the public regarding the advisability ofinvesting in an equity strategy generally or in the Altrius Disciplined Alpha Dividend Income strategy in particular or the ability of theMorningstar US Value TR US to track general equity market performance.
THE MORNINGSTAR ENTITIES DO NOT GUARANTEE THE ACCURACY AND/OR THE COMPLETENESS OF THEALTRIUS DISCPLINED ALPHA DIVIDEND INCOME STRATEGY OR ANY DATA INCLUDED THEREIN ANDMORNINGSTAR ENTITIES SHALL HAVE NO LIABILITY FOR ANY ERRORS, OMISSIONS, OR INTERRUPTIONS THEREIN.
DisclosureDISCLOSURE
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Toll Free: 855-ALTRIUSEmail Address: info@altrius-capital.com
Altrius Capital Management51 JFK Parkway, First Floor WestShort Hills, NJ 07078Phone: 201-399-0580
Altrius Capital Management4819 Emperor Blvd., Suite 400Durham, NC 27703Phone: 919-746-7977
Altrius Capital Management1323 Commerce DriveNew Bern, NC 28562Phone: 252-638-7598Fax: 252-635-6739
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mailto:info@altrius-capital.com
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