The Dearborn Partners Rising Dividend Fund Inst Is The Head Of The Large Blend Class

| About: Dearborn Partners (DRDIX)

Summary

The DearBorn Partners Rising Dividend Fund Inst is ranked 1st in the Large Blend Class with an 11.46% YTD Return.

The fund has been sparked by solid performances in holdings representing several sectors. These sectors include real estate, utilities, industrials and energy.

The fund has outperformed its benchmark in terms of both its upside and downside capture ratios.

The DearBorn Partners Rising Dividend Fund Inst (MUTF:DRDIX) is ranked first in the Large Blend Class with an 11.46% YTD Return. On the other hand, the S&P 500 has a 3.86% YTD Return while the Large Blend Category has a 2.07% return for the year.

Last year, this fund was ranked 88 th in the Large Blend Category with a -4.63% return in 2015 vs the S&P's 500 annual return of 1.38 and the Large Blend Category total of -1.07%.

When one looks at the market capitalization statistics, one can notice that the fund has a deficit of nearly 10% in terms of giant-cap weightings vs its benchmark and over 30% against its category average. Yet, the fund has a double-digit portfolio weight advantage in terms of mid-cap stocks versus its benchmarks. The chart can be seen below:

Size

% of Portfolio

Benchmark

Category Avg.

Giant

35.40

45.01

67.65

Large

32.79

32.74

12.04

Medium

31.81

20.16

17.36

Small

0.00

2.09

2.82

Micro

0.00

0.00

0.13

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In terms of sector weightings, the fund finds itself fortunate to hold a deficit in financial services sector weightings. The Financial Services Sector SPDR ETF (NYSEARCA:XLF) is the worst performing U.S Sector ETF so far this year with a -4.6% YTD Return. The DearBorn Partners Rising Dividend Fund Inst's deficit in financial services can be seen below.

Sector

% Stocks

Benchmark

Category Avg.

Financial Services

7.29

13.51

15.16

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When one dissects the inner holdings, the fund has several sectors that have jointly pushed the fund's performance forward towards its top ranking that it currently holds. The real estate, utilities, industrial and energy sectors are the sectors that have helped the most.

It is important to start with the performances of the real estate and utilities sectors. The DearBorn Partners Rising Dividend Fund Inst holds weight advantages in both of these sectors versus their benchmarks. While the real estate sector does not have a U.S Sector ETF, the Utilities Select Sector SPDR ETF (NYSEARCA:XLU) is the top performing U.S Sector ETF with a 22.0% YTD Return. Here is the fund's portfolio weight advantages in these sectors.

Sector

DRDIX Portfolio

Benchmark

Category Avg.

Real Estate

7.62

3.82

2.06

Utilities

7.81

3.65

2.76

Click to enlarge

Not one negative holding can be seen in either of these sectors.

Thus, the fund is justified in having portfolio advantages in both of these sectors. This can be seen below:

Real Estate Holding

Portfolio Weight

YTD Return

Realty Income Corp

3.00%

36.23%

WellTower Inc.

2.41%

12.54%

Digital Realty Trust Inc.

2.09%

46.52%

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Utilities Holding

Portfolio Weight

YTD Return

NextEra Energy Inc.

2.71%

25.20%

Xcel Energy Inc.

2.66%

25.31%

Aqua America Inc.

2.33%

16.63%

Click to enlarge

In addition, the fund has a slight portfolio weight advantage in the industrials sector versus its benchmarks. The Industrial Select Sector SPDR ETF (NYSEARCA:XLI) is the fourth in terms of U.S Sector ETF with a 7.0% YTD return. However, the fund's industrial holdings have sparked the fund's performance as all of its holdings have double-digit YTD Returns.

Industrial Holding

Portfolio Weight

YTD Return

Illinois Tool Works Inc

2.81%

15.47%

Jack Henry & Associates Inc

2.69%

11.91%

3M Co

2.55%

17.56%

United Parcel Service Inc Class B

2.38%

13.70%

Republic Services Inc Class A

2.35%

19.78%

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The fund is also fortunate to have solid holdings in the solid-performing energy sector as well. The Energy Select Sector SPDR ETF (NYSEARCA:XLE) is the second best performing U.S Sector ETF with a 12.0% YTD Return. Here are the holdings below:

Energy Holding

Portfolio Weight

YTD Return

Royal Dutch Shell PLC ADR Class B

2.47%

24.87%

Chevron Corp

2.28%

16.93%

Magellan Midstream Partners LP

1.88%

11.55%

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UPSIDE/DOWNSIDE CAPTURE RATIO

The fund has a significant advantage over its benchmarks in terms of limiting losses in down markets and outperforming in market upticks. As you can see in the graph below, the fund has outpaced the Large Blend Category in both ratios for the past three years.

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BUT…

The Dearborn Rising Partners Dividend Fund Inst has performed wonderfully. However, you will have to pay for it. Currently, the fund's expense ratio is 1.15% as of the fund's latest prospectus on 6/28/2016. The fund has a higher expense ratio than its benchmarks. However, the fund's expense ratio is 0.10 points lower than its expense ratios in 2014 and 2015. This can be seen below:

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CONCLUSION

I believe that the Dearborn Rising Partners Dividend Fund Inst is worth the investment at this time. Investors will be pleased to know that fund managers have made wise decisions in several sectors. The real estate, utilities, industrial and energy holdings have combined to power the performance of this fund. In addition, the fund's improved position in terms of the upside and downside capture ratio will provide comfort for potential investors.

Even though the fund is pricier than its benchmarks, its expense ratio is declining in the midst of its top-notch performance in the Large Blend Category. Therefore, I feel that this fund's attractiveness is ripe for investors at this time.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.