Georgian Income Growth Portfolio

Objective:  Our goal is to maximize total return for long-term investors, consisting of yield income and capital appreciation.  The Portfolio will invest in equity income securities, focusing on dividend-paying common and preferred shares, as well as distribution-paying income trust units.  The Portfolio will invest in a manner consistent with the Georgian fundamental, bottom-up philosophy and disciplined valuation-based process, combined with risk controls to reduce performance volatility.

Rationale:  At the foundation of all investments is the expectation of cash returns to the investor. Equities with growing dividends have significantly outperformed the broader equity indices over the long-term.  A well positioned portfolio of income equities, with an emphasis on operating free cash flows will also:

1. Aid in protecting capital in downward or volatile markets;
2. Be able to provide regular income; and,
3. Do so in a tax-efficient manner.

With our focused investment strategy, the Portfolio has the flexibility and agility to seek returns in multiple sectors and securities, regardless of market capitalization.

Strategy:  We will invest in companies with sustainable and growing free cash flows and cash distributions to shareholders, to maximize total returns, with below-market risk, over the long-term.  The Portfolio will be very “transparent”: each individual holding will be extensively researched and easily explainable as to why it contributes to our overall goal.  The Portfolio will be concentrated (15-25 holdings) and have relatively low turnover.  The investment processes are based upon:

1. Qualitative and quantitative screens;
2. Fundamental due diligence;
3. Valuation; and,
4. Portfolio risk management.

We believe that the combination of patience and compound total returns will produce significant wealth.