Why the name Camelback for a Dividend Fund?
Camelback Mountain is a major landmark in Phoenix that reinforces the fact that our investment decisions are made far
from Wall Street. We also feel that the name accurately reflects the objective of the fund:
We're looking for camels - companies that are fortified to the extent that they could live off of
their stored resources - or continue paying dividends - even when times are lean.
The most obvious criterion for selecting a stock for the fund is that it must pay a dividend. Why do we want
dividend-paying stocks? They tend to be boring, that's true. But in this case we like that. Boring means they're
less volatile, which means that they tend not to decline as much as other stocks in a down market. Or, as Wharton
Professor Jeremy Siegel describes it, they act as bear market protectors, particularly when the dividends are reinvested.
Boring also tends to be associated with lower returns. The funny thing is, that's not the case with dividend stocks.
The numbers don't lie - multiple studies have shown that companies paying dividends have outperformed the broader market
over long periods. While there is never a guarantee that such performance will be replicated, we think the reasons behind
that discrepancy still hold true.
Strong balance sheet
Not all dividend-paying companies are created equal. For the most part, we are looking for firms that have demonstrated
a substantial history of paying - and increasing - dividends. In all cases, we require that investment candidates have
fortified balance sheets that will ensure a high likelihood that they can continue to pay the dividends that attracted us
in the first place. If a company is paying out a very high percentage of its cash flow as a dividend, it's probably not
Likelihood of superior gains
Although a desire for ongoing income will be the motivating factor for many to invest in the fund, we focus on companies
that also have the potential for superior market returns in addition to providing a reliable income stream. Strong companies
that are trading for significantly less than their intrinsic value.
This is not a get-rich-quick portfolio. We are taking the long view. The market is volatile, and we are not hung-up on
short term swings. We aim to exceed stock market growth over a 3 to 5 year period, while providing steady income on an
Understandable businesses with an economic moat
While we don't limit ourselves to companies in a particular industry or of a particular size, we do focus on companies
whose businesses we understand. We're not looking for highly complex operations that are on the cutting edge of technology.
We want to clearly understand how they make money, and why they are going to continue to do so. A key part of that means
that they should have a moat that prevents competitors from easily entering their markets.
Is the Camelback Fund a mutual fund?
The Camelback Fund is not a mutual fund, nor a hedge fund. It is a Spoke Fund®. A Spoke Fund® is a collection of separate
investment accounts, or spokes, that are linked to and invested in the same way as a primary central account, or hub. The
hub account is managed by the portfolio manager, who maintains a significant percentage of his or her net worth in the Spoke
Fund®. We believe this structure is superior to a mutual fund for several reasons, starting with the transparency of both
fees and investments. Unlike mutual funds, spoke funds® feature accounts that are independent from other investors. This
provides tax flexibility, voting rights and the ability to exclude specific investments on moral or ethical grounds. For more
information about Spoke Funds®, please click here.
What are the fees for investing in the fund?
Unlike a mutual fund, which has sales and distribution fees, management fees, trading fees and redemption fees, the Camelback
Fund has only a flat management fee. That's one fee: no distribution fees, no trading fees, no other hidden fees. That
means when companies are bought or sold within the fund, you pay nothing. And unlike the average separately managed account,
you can invest in it for a flat .99%. With this fee comes not only management of the fund, but online access to current
portfolio data and reports on your holdings. You won't pay anything else for your investment.
Who will manage my money?
Kevin O'Reilly, CFP® is the president of Foothills Financial Planning, a licensed investment advisor in
Arizona and Utah. Kevin is a Certified Financial Planner™ practitioner, as well as a Chartered Retirement Planning Counselor™. He holds a bachelor's degree in Finance from Indiana
University, an MBA from Arizona State University and a Financial Planning Certificate from Boston University. Kevin was a
contributing author to Investing in an Uncertain Economy for Dummies, and has been quoted in the Arizona Republic, Bloomberg Businessweek, Reuters, Phoenix
Business Journal, Marketwatch, and Good Housekeeping, among other publications.
How can I invest in the Camelback Fund?
Investing in the Fund is easy. Give us a call at (480) 445-9072, or email us and we will help you through the process.