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Consuelo Mack Interview With Bill Priest

It's appropriate that the markets are silent on this Memorial Day of remembrance.

This week's WealthTrack interview by Consuelo Mack is with Bill Priest and Tim Hartch, "Award Winning Managers, Contrasting Strategies."

Dividend investors may be particularly interested in Priest's comments about how stocks are chosen for his MainStay Epoch Global Equity Yield Fund.

Priest says every company has five options for how to deploy its free cash flow:

1. Pay dividends

2. Buy back stock

3. Pay down debt

4. Invest in the business

5. Buy other companies.

His goal is to build a fund with a 9% return, comprised of 4.5% in dividends, 1.5% in either buybacks or debt reduction, and 3% growth.

I always enjoy looking at the portfolios of funds that have great track records. Priest's Global Equity fund seeks to have 100-105 stocks with a low beta (.75). Here are the top ten equity sectors in the fund's holdings (as of March 28, 2013):

Diverse Telecommunication Services 11.30%

Pharmaceuticals 10.88%

Tobacco 7.74%

Electric Utilities 7.09%

Multi-Utilities 6.90%

Media 4.95%

Oil, Gas & Consumable Fuels 4.22%

Insurance 3.98%

Aerospace & Defense 3.87%

Wireless Telecommunication Services 3.33%.

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