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<p><strong>By: Marriott</strong></p>

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<p>Our investment philosophy is to buy high quality, diversified and resilient companies with a history of paying reliable and growing dividends. We take a long-term view and select companies we are comfortable holding in our portfolios for 10 years or more. This strategy has served our investors well over the long-term and is proving to be especially beneficial for our investors through the current COVID-19 crisis.</p>

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<p>We apply a stringent filter process when selecting companies for our portfolios. This ensures we hold only top-quality companies that can reliably grow their dividends through all stages of interest rate, business and economic cycles for a successful long-term investment outcome. The diagram below outlines how the filter works</p>

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<figure class="wp-block-image size-large"><img src="https://cover.co.za/wp-content/uploads/2020/11/M1.jpg" alt="" class="wp-image-144444"/></figure>

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<p>The companies that make it through the filter process tend to be market leaders with strong brands, robust balance sheets, reliable cash flows, and produce goods or services that are integral to the lives of their customers. These are qualities that are often under-appreciated when times are goodbut become increasingly valued in times of economic uncertainty. Johnson & Johnson, for example, was able to increase its dividend by 6.3% in June, representing a 58^th consecutive annual increase.</p>

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<figure class="wp-block-image size-large"><img src="https://cover.co.za/wp-content/uploads/2020/11/M2.jpg" alt="" class="wp-image-144445"/></figure>

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<p>Source Bloomberg</p>

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<p>In an environment characterised by low interest rates, companies that are able to grow their earnings, and produce reliable dividends, are an attractivelong-term proposition.</p>

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<h2>•  Attractive Dividend Yields</h2>

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<p>We only invest in companies that pay reliable dividends. In our opinion, companies of this nature are currently offering very good value as thedifferential between their dividend yields and the 10-year US Government Bond yield is the widest it has been in over 30 years. An added benefit is that these dividends tend to grow over time, whereas the coupon from a Government Bond is flat for the term of the bond. The below highlights the weighted average dividend yield (3.1%) of the international equities held in the Marriott portfolios, compared to the 10-year US GovernmentBond yield (0.5%).</p>

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<figure class="wp-block-image size-large"><img src="https://cover.co.za/wp-content/uploads/2020/11/M3.jpg" alt="" class="wp-image-144446"/></figure>

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<h2>•  Resilient Dividend Growth</h2>

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<p>Our income focused investment style emphasises multinational companies which are resilient in nature and offer timeless products and brands. Assuch, we anticipate that 90-100% of the businesses we invest in will either maintain or grow their dividends in 2020 despite the current uncertainty.</p>

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<p><strong>Below are details of just two of the companies we hold in our international portfolios:</strong></p>

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<figure class="wp-block-image size-large"><img src="https://cover.co.za/wp-content/uploads/2020/11/Screenshot-2020-11-03-at-14.00.41.png" alt="" class="wp-image-144447"/></figure>

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<h3>Investors can access these companies with Marriott in two ways:</h3>

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<ul><li>Using their individual offshore allowance of R11 million per annum to invest directly into:<ul><li>Marriott’s direct offshore share portfolio (International Investment Portfolio), or</li><li> Marriott’s international unit trusts</li></ul></li><li>Using Marriott’s asset swap capacity to invest in our local feeder funds which invest directly into our international unit trust funds</li></ul>

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