Trillium News

Trillium Launches Growth and Income Strategy

Responding to increasing calls for a higher dividend equity product, Trillium formally launched a dedicated Growth and Income Strategy in January. This product targets higher dividend paying companies to increase the income generation of the portfolio, while still investing in companies with strong environmental, social, and governance profiles.

As a category, income-focused equity products have generated considerable attention in recent years as a solution to three common problems faced by baby boomers:

  • a low interest rate environment where bonds are not providing the income of years’ past
  • a volatile market where many investors favor concrete dividends over uncertain appreciation
  •  a need for regular income payouts to supplement retirement income

According to Trillium’s lead Portfolio Manager for the product Stephanie Leighton, CFA, “As baby boomers age they are increasingly seeking products that provide both growth and income: growth for future needs and current income to meet current needs. This product identifies companies with the best combination of attractive growth profiles and income generation, all in a wrapper of risk-control and social and environmental impact.” In addition to Stephanie, Managing Partner Cheryl Smith, CFA serves as portfolio manager on the product, along with the newest addition to Trillium’s staff, Portfolio Manager Elizabeth Levy, CFA.

Trillium first started providing an income overlay on its Large Cap Core product in March 2006. Six years later we have dozens of clients who have selected this overlay and we see the product fills a need in the marketplace. Like Trillium’s Large Cap Core product, Growth and Income references the S&P 500 as its benchmark. However, this product targets a higher dividend yield than the benchmark, which is currently just over 2 percent. Not surprisingly, the product is somewhat higher in average capitalization than Large Cap Core, as larger companies in many sectors tend to pay a higher dividend. We also have higher sector deviation than the Large Cap product, generally with overweight to higher dividend paying sectors such as healthcare, utilities, and telecoms.

While the Growth and Income strategy shares some common names with Large Cap Core, we tend to see the higher dividend names in the top 10 list. For example, one of our top holdings is Microsoft, which now sports a 2.5 percent yield while still providing very strong growth characteristics. We also hold some names not currently found in our other strategies, for example, Health Care Properties, a Real Estate Investment Trust (REIT) with a 5 percent yield.

The launch of our Growth and Income product continues to round out Trillium’s product offerings, a key goal of CEO Matt Patsky since he joined the firm nearly three years ago. According to Matt, “Trillium has now grown to over $1 billion in assets under management. An important element of our growth is to identify products that our clients need as they seek to align their investments with their values. We look forward to updating you on other product innovations in coming months.”