GMG Defensive Beta Fund 2012 Dividend Picks

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Includes: INTC, MCD, RDS.A
by: MyPlanIQ

Gregg Greenberg of StockPikr reports on the words and actions from Oliver Pursche, co-portfolio manager of GMG Defensive Beta Fund (MPDAX).

Oliver says, "No one is saying you shouldn't own growth stocks. The point is that dividends are a key component of total return, so investing in high-quality, high dividend paying stocks that also have growth characteristics should do very well in 2012, just like it did in 2011."

His three high-quality dividend stock picks for 2012 are:

  • McDonald's (NYSE:MCD)
  • Intel (NASDAQ:INTC)
  • Royal Dutch Shell (NYSE:RDS.A)

McDonald's and Intel have been featured a great deal recently but Shell is a less frequent visitor in the spotlight.

We have reviewed other sets of three equity selections and it will be interesting to see how this one performs. All of these are strong companies with worldwide markets and they have strong dividend performance.

Asset Fund in this portfolio
REAL ESTATE (BATS:ICF) iShares Cohen & Steers Realty Majors
CASH CASH
FIXED INCOME (NYSEARCA:TIP) iShares Barclays TIPS Bond
Emerging Market (NYSEARCA:VWO) Vanguard Emerging Markets Stock ETF
US EQUITY (NYSEARCA:DVY) iShares Dow Jones Select Dividend Index
US EQUITY (NYSEARCA:VIG) Vanguard Dividend Appreciation ETF
INTERNATIONAL EQUITY (BATS:IDV) iShares Dow Jones Intl Select Div Idx
High Yield Bond (NYSEARCA:HYG) iShares iBoxx $ High Yield Corporate Bd
INTERNATIONAL BONDS (NYSEARCA:EMB) iShares JPMorgan USD Emerg Markets Bond

Portfolio Performance Comparison

Portfolio/Fund Name YTD
Return
1Yr AR 1Yr Sharpe 3Yr AR 3Yr Sharpe 5Yr AR 5Yr Sharpe
Retirement Income ETFs Tactical Asset Allocation Moderate 1% 2% 22% 10% 77% 7% 54%
CMG Defensive Beta Fund 2012 Dividend Picks -1% 28% 155% 21% 112% 13% 53%
Retirement Income ETFs Strategic Asset Allocation Moderate 3% 2% 14% 16% 103% 2% 7%

This is a pretty good return based on these stalwart stocks. We note that with only three equities, there will be volatility but the returns are solid over the five-year horizon. This selection is a great basis upon which to build a long-term investment portfolio.

Having a base of three strong performers is a great start and it makes it easier to review and make changes if necessary.

These guys are on the ball.

Three-Month Chart One-Year Chart Three-Year Chart Five-Year Chart

As I look over the longer time horizon, this selection has done very well. The volatility is decent and it has weathered the downturns with less of a drop than others. Given that this is a fire and forget historical view compared with monthly intervention with the benchmarks, this is good.

Personally speaking, I have now purchased small holdings in MCD and INTC but not in RDS as I already have a small holding in CVX.

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Disclosure: I am long MCD, INTC, CVX.

Additional disclosure: MyPlanIQ does not have any business relationship with the company or companies mentioned in this article. It does not set up their retirement plans. The performance data of portfolios mentioned above are obtained through historical simulation and are hypothetical.