The Haverford
Quality 250 is a separately managed portfolio, meticulously
constructed from a diverse group of A-rated and dividend paying
companies with the precise weightings of each company in the
portfolio based upon the total dividends paid by that company.
Due to their consistency and their direct link to a company’s
underlying earnings power, dividends provide an excellent baseline
against which to execute regular rebalancing of allocations across
a portfolio.
 Advantages of Fundamental Weighting:
• Better diversification and lower turnover than the
typical active manager.
• Alpha-generation above that of an index fund.
Traditional indexes, with constituent weightings based on
market capitalization or share prices, are susceptible to market
noise. As stock prices fluctuate, these indexes are required
to purchase more of a stock when its price is high and less
when the price is low. Fundamental weighting overcomes this
weakness by utilizing factors that are dependent upon a company’s
business, not the stock’s price.
The resulting portfolio exhibits the key characteristics needed
to deliver excellent risk-adjusted performance: a superior
dividend yield, strong growth in earnings and dividends, exceptional
risk control, and a modest valuation.
The top 100 companies are stable, highly recognized, established
firms that pay a majority of all stock dividends. The next
150 include smaller market cap companies with more growth opportunities.
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