Minimum Volatility Equity Income Portfolio › FISDocuments › FISDocuments › ... · IBM...

4
EQUITY - THEMATIC Minimum Volatility Equity Income Portfolio Fee-Based CUSIP (Cash/Reinvest) Ticker Symbol Ticketing Information 00774N368 / 376 MVIAIX Unit price at inception (per unit) Initial redemption price (per unit) Initial date of deposit Portfolio ending date Distribution frequency Est. net annual distribution (per unit)* Essential Information + $9.7550 $9.7550 5/18/2017 8/17/2018 Monthly, if any $0.3134 + As of 5/17/2017 and may vary thereafter. *The estimate is generally based on the estimate of dividends the trust will receive by annualizing the most recent dividend declared. The per unit estimate will vary with changes in fees and expenses, actual dividends received and with the sales of securities. There is no guarantee that the issuers of the securities included in the trust will declare distributions in the future or that, if declared, will remain at current levels or increase over time. Morningstar Equity Style Box TM Page 1 of 4 Advisors Asset Management, Inc. (AAM) is a SEC registered investment advisor and member FINRA/SIPC. Fee-Based Account UIT Fact Card ++All amounts are as of 5/17/2017 and may vary thereafter. The Creation & Development Fee is fixed at $0.05 per unit and is paid at the end of the initial offering period (anticipated to be approximately three months). The Organization Costs are fixed at $0.049 per unit and are paid at the end of the initial offering period or after six months, if earlier. The above table is for illustrative purposes only to illustrate how estimated trust fees and expenses translate on an annualized basis. The above does not reflect the amount or how all fees and expenses will actually be paid. You should consult the prospectus for a full description of applicable sales charges and expenses of the trust, including those applicable to purchasers eligible for the fee- based account discount. The one-time charges shown (the Creation & Development Fee and Organization Costs) are paid on a one-time basis as described and are not actually amortized over the life of the trust. The amount shown for “Amortized One-Time Charges” are calculated by taking the one-time dollar amounts and dividing them by the anticipated life of the based on the trust’s inception date and mandatory termination date. The “Estimated Average Amortized Annual Expenses” is taken by adding the “Amortized One-Time Charges” amount and “Estimated Annual Operating Expense” amounts. Fee-Based Accounts Sales Charge and Expenses (Based on initial Fee-Based Account unit price of $9.755)++ As % of Fee-Based Public Offering Price Amount per unit (based on initial unit price) Creation & Development Fee 0.51% $0.050 Organizational Costs + 0.50% $0.049 Total One-Time Expense 1.01% $0.099 Divided by Term of Trust equals Amortized One-Time Charges ÷ 1.25 years ÷ 1.25 years Amortized One-Time Charges 0.81% $0.079 Estimated Annual Operating Expense + 0.33% + $0.032 Estimated Average Amortized Annual Expenses 1.14% $0.112 FOR USE ONLY WITH INVESTOR ACCOUNTS ELIGIBLE FOR THE “FEE-BASED ACCOUNT” SALES CHARGE DESCRIBED ON PAGE 4 The Minimum Volatility Equity Income Portfolio seeks to provide above-average dividend income and lower volatility compared to the broader U.S. equity market with capital appreciation as a secondary objective. There is no assurance the trust will achieve its objective. Investment Objective & Principal Investment Strategy The Minimum Volatility Equity Income Portfolio focuses primarily on common stocks of large capitalization companies (defined as companies with capitalizations within the collective range of the Russell 1000 ® and S&P 500 ® Indices as of the trust’s inception) selected by Hartford Investment Management Company (“HIMCO”), the portfolio consultant. In selecting the portfolio, HIMCO sought to achieve the lowest amount of expected volatility compared to the broad U.S. equity market over the life of the trust subject to a set of reasonable constraints related to quality and dividend yield designed by HIMCO. Low volatility stocks tend to have lower risk profiles than the equity market in general. Investing in low volatility stocks may not protect the trust from market declines and may reduce the trust’s participation in market gains. Security Selection Investment Process *Beta is a measure of the risk arising from exposure to general market movements. Idiosyncratic risk is specific to an asset or a small group of assets. It typically has little or no correlation with market risk. Series 2017-2Q, ADT 1793

Transcript of Minimum Volatility Equity Income Portfolio › FISDocuments › FISDocuments › ... · IBM...

Page 1: Minimum Volatility Equity Income Portfolio › FISDocuments › FISDocuments › ... · IBM International Business Machines 150.93 JKHY Jack Henry & Associates, Inc. 97.86 MSFT Microsoft

EQUITY - THEMATIC

Minimum Volatility Equity Income Portfolio

Fee-Based CUSIP (Cash/Reinvest) Ticker Symbol

Ticketing Information

00774N368 / 376 MVIAIX

Unit price at inception (per unit) Initial redemption price (per unit) Initial date of deposit Portfolio ending date Distribution frequency Est. net annual distribution (per unit)*

Essential Information+

$9.7550 $9.7550

5/18/2017 8/17/2018

Monthly, if any $0.3134

+As of 5/17/2017 and may vary thereafter. *The estimate is generally based on the estimate of dividends the trust will receive by annualizing the most recent dividend declared. The per unit estimate will vary with changes in fees and expenses, actual dividends received and with the sales of securities. There is no guarantee that the issuers of the securities included in the trust will declare distributions in the future or that, if declared, will remain at current levels or increase over time.

Morningstar Equity Style BoxTM

Page 1 of 4

Advisors Asset Management, Inc. (AAM) is a SEC registered investment advisor and member FINRA/SIPC.

Fee-Based Account UIT Fact Card

++All amounts are as of 5/17/2017 and may vary thereafter. The Creation & Development Fee is fixed at $0.05 per unit and is paid at the end of the initial offering period (anticipated to be approximately three months). The Organization Costs are fixed at $0.049 per unit and are paid at the end of the initial offering period or after six months, if earlier. The above table is for illustrative purposes only to illustrate how estimated trust fees and expenses translate on an annualized basis. The above does not reflect the amount or how all fees and expenses will actually be paid. You should consult the prospectus for a full description of applicable sales charges and expenses of the trust, including those applicable to purchasers eligible for the fee-based account discount. The one-time charges shown (the Creation & Development Fee and Organization Costs) are paid on a one-time basis as described and are not actually amortized over the life of the trust. The amount shown for “Amortized One-Time Charges” are calculated by taking the one-time dollar amounts and dividing them by the anticipated life of the based on the trust’s inception date and mandatory termination date. The “Estimated Average Amortized Annual Expenses” is taken by adding the “Amortized One-Time Charges” amount and “Estimated Annual Operating Expense” amounts.

Fee-Based Accounts Sales Charge and Expenses (Based on initial Fee-Based Account unit price of $9.755)++

As % of Fee-Based

Public Offering Price

Amount per unit (based on

initial unit price)

Creation & Development Fee 0.51% $0.050

Organizational Costs + 0.50% $0.049

Total One-Time Expense 1.01% $0.099

Divided by Term of Trust equals Amortized One-Time Charges

÷ 1.25 years ÷ 1.25 years

Amortized One-Time Charges 0.81% $0.079

Estimated Annual Operating Expense

+ 0.33% + $0.032

Estimated Average Amortized Annual Expenses

1.14% $0.112

FOR USE ONLY WITH INVESTOR ACCOUNTS ELIGIBLE FOR THE “FEE-BASED ACCOUNT” SALES CHARGE DESCRIBED ON PAGE 4

The Minimum Volatility Equity Income Portfolio seeks to provide above-average dividend income

and lower volatility compared to the broader U.S. equity market with capital appreciation as a

secondary objective. There is no assurance the trust will achieve its objective.

Investment Objective & Principal Investment Strategy

The Minimum Volatility Equity Income Portfolio focuses primarily on common stocks of large

capitalization companies (defined as companies with capitalizations within the collective range of

the Russell 1000® and S&P 500® Indices as of the trust’s inception) selected by Hartford

Investment Management Company (“HIMCO”), the portfolio consultant. In selecting the portfolio,

HIMCO sought to achieve the lowest amount of expected volatility compared to the broad U.S.

equity market over the life of the trust subject to a set of reasonable constraints related to quality

and dividend yield designed by HIMCO. Low volatility stocks tend to have lower risk profiles than

the equity market in general. Investing in low volatility stocks may not protect the trust from market

declines and may reduce the trust’s participation in market gains.

Security Selection

Investment Process

*Beta is a measure of the risk arising from exposure to general market movements. Idiosyncratic risk is specific to an asset or a small group of assets. It typically has little or no correlation with market risk.

Series 2017-2Q, ADT 1793

Page 2: Minimum Volatility Equity Income Portfolio › FISDocuments › FISDocuments › ... · IBM International Business Machines 150.93 JKHY Jack Henry & Associates, Inc. 97.86 MSFT Microsoft

Minimum Volatility Equity Income Portfolio

Intelligent Investments. Independent Ideas.

Page 2 of

Series 2017-2Q, ADT 1793 Fee-Based Account UIT Fact Card

FOR USE ONLY WITH INVESTOR ACCOUNTS ELIGIBLE FOR THE “FEE-BASED ACCOUNT” SALES CHARGE DESCRIBED ON PAGE 4

Portfolio Holdings Ticker

Symbol Issue Name

Market Value Per Share*

Consumer Discretionary (7.04%)

LVS Las Vegas Sands $56.84 M Macy’s, Inc. 23.01 MCD McDonald’s 146.41 SPLS Staples, Inc. 8.85 TGT Target 55.04

Consumer Staples (13.61%) MO 70.55 CLX 131.23 KO 43.93 K 70.53 PEP 113.74 PM 113.75 PG 86.26 WMT 75.12

Energy (5.93%) CVX Chevron 104.70 XOM Exxon Mobil 81.99 OXY Occidental Petroleum 60.27

Financials (16.22%) AGNC 20.16 NLY 11.49 CME 115.12 RE 241.65 NYCB 12.80 PBCT 16.68 PRA 57.80 TRI 43.07 USB 50.46 WFC 52.24

Health Care (16.77%)

CAH 71.60

LLY 78.14

GILD 64.51

JNJ 126.67

MDT 82.66

Industry Group Breakdown % of Portfolio

Consumer Discretionary (7.04%)

Consumer Services 3.35%

Retailing 3.69%

Consumer Staples (13.61%)

Food & Staples Retailing 1.97%

Food Beverage & Tobacco 8.08%

Household & Personal Products 3.56%

Energy (5.93%)

Financials (16.22%)

Banks 7.00%

Diversified Financials 5.54%

Insurance 3.68%

Health Care (16.77%)

Health Care Equipment & Services 6.37%

Pharmaceuticals, Biotechnology 10.40%

Industry Group Breakdown*

Source: Global Industrial Classification Standard (GICS) *As of 5/17/2017 and may vary thereafter. Breakdowns are based on the sources shown and may differ from any category definitions used in selecting the trust portfolio.

Ticker Symbol

Issue Name

Market Value Per Share*

Health Care (continued…)

MRK Merck & Company, Inc. $63.00 PFE Pfizer, Inc. 32.23 DGX Quest Diagnostics, Inc. 105.12 UNH UnitedHealth Group, Inc. 168.86

Industrials (9.50%)

CVA Covanta Holding 14.15 EMR Emerson Electric 57.99 GE General Electric 27.41 HON Honeywell International, Inc. 129.94 LMT Lockheed Martin 269.24 UPS United Parcel Service, Inc. 102.87

Information Technology (16.10%)

DOX Amdocs Limited 62.99 AAPL Apple, Inc. 150.25 CA CA, Inc. 31.21 CSCO Cisco Systems, Inc. 33.82 INTC Intel 35.04 IBM International Business Machines 150.93 JKHY Jack Henry & Associates, Inc. 97.86 MSFT Microsoft 67.48

Materials (1.65%)

PX Praxair, Inc. 128.82

Real Estate (1.39%)

CCI Crown Castle International Corporation 98.12

Telecommunications Services (7.67%)

T AT&T, Inc. 37.46 CTL CenturyLink, Inc. 24.55 FTR Frontier Communications 1.33 VZ Verizon Communications, Inc. 44.48

Utilities (4.12%)

ED Consolidated Edison, Inc. 79.36 DUK Duke Energy 82.78 FE FirstEnergy 28.59 SO The Southern 49.64

Industry Group Breakdown % of Portfolio

Industrials (9.50%)

Capital Goods 6.19%

Commercial & Professional Services 1.30%

Transportation 2.01%

Information Technology (16.10%)

Semiconductors & Equipment 1.79%

Software & Services 9.48%

Technology Hardware & Equipment 4.83%

Materials (1.65%)

Real Estate (1.39%)

Telecommunication Services (7.67%)

Utilities (4.00%)

Page 3: Minimum Volatility Equity Income Portfolio › FISDocuments › FISDocuments › ... · IBM International Business Machines 150.93 JKHY Jack Henry & Associates, Inc. 97.86 MSFT Microsoft

Minimum Volatility Equity Income Portfolio

Intelligent Investments. Independent Ideas.

Page 3 of 4

Series 2017-2Q, ADT 1793 Fee-Based Account UIT Fact Card

Minimum volatility strategies seek to produce comparable returns to the broad markets with less volatility*

Over the 10-year period ended March 31, 2017, the S&P 500 Minimum Volatility Index has outperformed the S&P 500® Index with substantially lower volatility.

It has also produced a Beta relative to the S&P 500® Index of 0.74 over that time period, showing significantly reduced market risk.

Attractive Income Potential

Enhanced dividend income potential relative to the broad U.S. equity market

Lower Relative Volatility & Risk Profiles

Focus on minimum volatility and high-quality factors seeks to provide lower volatility and risk profiles relative to traditional broad market equity indices, such as the S&P 500® Index.

Strong Risk-Adjusted Return Potential

Risk-managed selection focuses on producing higher risk-adjusted returns

Liquidity

Focus on large capitalization stocks potentially provides greater liquidity

Equity Investment

Potential for capital appreciation and inflation protection

FOR USE ONLY WITH INVESTOR ACCOUNTS ELIGIBLE FOR THE “FEE-BASED ACCOUNT” SALES CHARGE DESCRIBED ON PAGE 4

Key Points to Consider

Why Minimum Volatility?

*There can be no assurance that this objective will be met or that losses will be avoided. The trust is not intended to track the performance of the S&P 500 Minimum Volatility Index, the S&P 500 Index or any other index. The S&P 500® Index is an index of stocks compiled by Standard & Poor’s, a division of the McGraw-Hill Companies, Inc. The S&P 500® Minimum Volatility Index is designed to reflect a managed-volatility equity strategy that seeks to achieve lower total risk, measured by standard deviation, than the S&P 500® Index while main-taining similar characteristics. Source: Callan, Standard & Poor’s as of March 31, 2017. Past performance is no guarantee of future results. Each index shown is unmanaged and the returns do not reflect the actual cost of investing in the instruments that comprise it. You cannot invest directly in an index. Standard Deviation is a measure of price volatility (risk). A higher degree of variability indicates more volatility and therefore greater risk. Beta is a measure of the risk arising from exposure to general market movements.

Historical Risk & Reward for the 10-Year Period Ended March 31, 2017

Source: Morningstar

As of 5/17/2017 and may vary thereafter. Breakdowns are based on the sources shown and may differ from any category definitions used in selecting the trust portfolio.

% of Portfolio

Large-Cap Blend 30.53%

Large-Cap Growth 11.47%

Large-Cap Value 33.46%

Mid-Cap Blend 4.70%

Mid-Cap Growth 1.38%

Mid-Cap Value 13.76%

Small-Cap Blend 2.22%

Small-Cap Value 2.48%

Holdings Style Summary

Page 4: Minimum Volatility Equity Income Portfolio › FISDocuments › FISDocuments › ... · IBM International Business Machines 150.93 JKHY Jack Henry & Associates, Inc. 97.86 MSFT Microsoft

Minimum Volatility Equity Income Portfolio

Unit Investment Trusts (UITs) are sold only by prospectus. You should consider the trust’s investment objectives, risks, charges and expenses carefully before investing. Contact your financial professional or visit Advisors Asset Management online at www.aamlive.com/uit to obtain a prospectus, which contains this and other information about the trust. Read it carefully before you invest.

Risks and Considerations: All investments involve risk, including possible loss of principal. Unit values will fluctuate with the portfolio of underlying securities and may be worth more or less than the original purchase price at the time of redemption. There is no guarantee that the objective of the portfolio will be achieved. Additionally, the trust may terminate earlier than the specific termination date as stated in the prospectus. Consult your tax advisor for possible tax consequences associated with this investment. An investment in this unmanaged unit investment trust should be made with an understanding of the risks associated therewith that includes, but is not limited to: Common Stock: An investment in common stocks should be made with an understanding of the various risks of owning common stock, such as an economic recession and the possible deterioration of either the financial condition of the issuers of the equity securities or the general condition of the stock market. Dividend Payment Risk: An issuer of a security may be unwilling or unable to pay income on a security. Common stocks do not assure dividend payments and are paid only when declared by an issuer’s board of directors. The amount of any dividend may vary over time. Long-Term Strategy: Although this unit investment trust terminates in approximately 15 months, the strategy is long term. Investors should consider their ability to pursue investing in successive portfolios, if available. Small & Mid-Size Companies: The trust may invest in securities issued by small and mid-size companies. These stocks are often more volatile and have lower trading volumes than stocks of larger companies. Small and mid-size companies may have limited products or financial resources, management inexperience and less publicly available information. The Morningstar Equity Style Box™: This table provides a graphical representation of the investment style of a trust based on holdings as of the date of deposit which may vary thereafter. The Morningstar Equity Style Box™ placement is based on the Morningstar market capitalization classification (determined relative to other stocks in the same geographic area) of the stocks in the trust’s portfolio (vertical axis), and by comparing the growth and value characteristics of the stocks in the trust’s portfolio with growth and value factors developed by Morningstar (horizontal axis). Value, blend and growth are types of investment styles. Growth investing generally seeks stocks that offer the potential for greater-than-average earnings growth, and may entail greater risk than value or blend investing. Value investing generally seeks stocks that may be sound investments but are temporarily out of favor in the marketplace, and may entail less risk than growth investing. A blended investment combines the two styles. ©2016 Morningstar, Inc. All Rights Reserved. The information contained herein relating to the Morningstar Equity Style Box™: (1) is proprietary to Morningstar and/or its content providers; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. For Use Only with Eligible Fee-Based Account Investors: During the trust’s initial offering period, investors who purchase units through registered investment advisers, certified financial planners or registered broker-dealers who in each case either charge investor accounts periodic fees for brokerage services, financial planning, investment advisory or asset management services, or provide such services in connection with an investment account for which a comprehensive “wrap fee” charge is imposed may be eligible to purchase units of the trust in fee-based accounts that are not subject to the transactional sales fee but will be subject to the creation and development fee that is collected by the sponsor (i.e. the “Fee-Based Account” sales charge). You should consult your financial advisor to determine whether you can benefit from these accounts and whether your unit purchases are eligible for this discount. To purchase units in these accounts, your financial advisor must purchase units designated with one of the Fee Account CUSIP numbers, if available. The amounts shown are different from what would be applicable for units purchased in other accounts (i.e. commission-based accounts) not eligible for this discount. See your prospectus and consult your financial advisor for more information about eligibility and applicability of the fee-based account discount. This communication may only be used with investors that are eligible for this discount. The information provided does not constitute investment advice and is not an offering of or a solicitation to buy or sell any security, product, service or fund, including the fund being advertised.

Securities are available through your financial professional. Not FDIC Insured. Not Bank Guaranteed. May Lose Value. For informational purposes only and not a recommendation to purchase or sell any security.

18925 Base Camp Road Monument, CO 80132 www.aamlive.com

©2017 Advisors Asset Management, Inc. Advisors Asset Management, Inc. (AAM) is a SEC registered investment advisor and member FINRA/SIPC. HIMCO is a registered investment adviser. SEC registration does not imply a certain level of skill or training; not does it imply that the SEC has sponsored, recommended or otherwise approved of HIMCO.

AAM is not affiliated with HIMCO. CRN: 2017-0213-5809 R / 17-0024

Intelligent Investments. Independent Ideas.

Page 4 of 4

Follow AAM Live:

Series 2017-2Q, ADT 1793 Fee-Based Account UIT Fact Card

FOR USE ONLY WITH INVESTOR ACCOUNTS ELIGIBLE FOR THE “FEE-BASED ACCOUNT” SALES CHARGE