small/mid-cap advantage portfolio (smid)€¦ · consultant, through the application of their...

EQUITY - THEMATIC PORTFOLIOS

Series 2018-3, ADT 1892

// Portfolio Selected by: Peroni Portfolio Advisors, Inc.

Investment Objective & Strategy The Small/Mid-Cap Advantage Portfolio (SMID) is a unit investment trust (UIT) that seeks above-

average total return primarily through capital appreciation. This UIT seeks to achieve its objective

by investing in a portfolio of securities selected from a universe of common stocks of companies

which are categorized as small-cap (market capitalization equal to or less than $3.556 billion) and

mid-cap (market capitalization greater than $3.556 billion and equal to or less than $17.837

billion), representing the Morningstar market capitalization breakpoints as of the trust’s inception.

The portfolio was selected by Eugene E. Peroni, Jr. of Peroni Portfolio Advisors, Inc., the Portfolio

Consultant, through the application of their proprietary method of technical analysis, the Peroni

Method®.

SMID was designed to be strategically diversified in that sector weightings are determined by a

bottom-up, technical approach and represent the individual stocks and sectors PPA believes

have the potential to lead the market in the 18 to 24 months following the trust’s inception.

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

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Small/Mid-Cap Advantage Portfolio (SMID)

CUSIP (Cash/Reinvest)

Fee-Based CUSIP (Cash/Reinvest) Ticker Symbol

Ticketing Information

00778Q581 / 599 00778Q607 / 615

SMIDPX

Unit price at inception (per unit) Initial redemption price (per unit) Initial date of deposit Portfolio ending date Distribution frequency Est. net annual dist per unit (1st year)*

Est. net annual dist per unit (2nd year)*

Essential Information+

$10.000 $9.7750 9/7/2018

9/10/2020 Semi-Annual, if any

$0.0224 $0.0221

+As of 9/6/2018 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. The distributions are expected to decrease in the subsequent year as a result of organizational costs, creation and development fee, and deferred sales charges. 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

Sales Charges (Based on $10 unit price)++

Standard Accounts As a % of $1,000

invested Amount per

100 units

Initial sales fee Deferred sales fee Creation & Development fee Maximum sales fee

0.00% 2.25% 0.50% 2.75%

$0.00 $22.50 $5.00

$27.50

++The initial sales fee is the difference between the total sales fee (maximum of 2.75% of the unit offering price) and the sum of the remaining deferred sales fee and the total creation and development fee. The deferred sales fee is fixed at $0.225 per unit and is paid in three monthly installments beginning December 20, 2018. The creation and 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). When the public offering price per unit is less than or equal to $10, you will not pay an initial sales fee. When the public offering price per unit price is greater than $10 per unit, you will pay an initial sales fee. The initial and deferred sales fees may not apply to fee-based accounts. See the prospectus for more details about fee-based account eligibility requirements.

Fee-Based Accounts As a % of Fee-Based Public Offering Price

Amount per 100 units

Maximum sales fee 0.51% $5.00

Intelligent Investments. Independent Ideas.

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Portfolio Holdings (as of date of deposit)

Ticker Symbol

Issue Name

Market Value Per Share*

Information Technology (26.21%)

BR Broadridge Financial Solutions, Inc. $136.98

CACI CACI International, Inc. 196.30

CYBR CyberArk Software Limited 75.40

EPAM EPAM Systems, Inc. 135.69

FFIV F5 Networks, Inc. 190.18

GRUB GrubHub, Inc. 137.75

HUBS HubSpot, Inc. 147.25

JKHY Jack Henry & Associates, Inc. 159.57

MPWR Monolithic Power Systems, Inc. 149.32

PAYC Paycom Software, Inc. 152.04

SEND SendGrid, Inc. 35.89

TYL Tyler Technologies, Inc. 248.33

ZBRA Zebra Technologies Corporation 166.98

Materials (14.01%)

ATR AptarGroup, Inc. 108.95

ASH Ashland Global Holdings, Inc. 84.42

BCPC Balchem Corporation 110.99

CRS Carpenter Technology Corporation 57.81

CE Celanese Corporation 115.31

CF CF Industries Holdings, Inc. 50.95

MTRN Materion Corporation 61.60

*As of 9/6/2018 and may vary thereafter.

Small/Mid-Cap Advantage Portfolio (SMID) Series 2018-3, ADT 1892

Ticker Symbol

Issue Name

Market Value Per Share*

Consumer Discretionary (23.86%)

AAP Advance Auto Parts, Inc. $167.22

CHDN Churchill Downs, Inc. 263.95

DRI Darden Restaurants, Inc. 118.81

DPZ Domino’s Pizza, Inc. 290.53

FIVE Five Below, Inc. 115.51

IRBT iRobot Corporation 104.57

OLLI Ollie’s Bargain Outlet Holdings, Inc. 87.95

ROKU Roku, Inc. 63.60

MTN Vail Resorts, Inc. 291.64

W Wayfair, Inc. 132.95

WING Wingstop, Inc. 68.87

WWE World Wrestling Entertainment, Inc. 87.10

Consumer Staples (1.95%)

WDFC WD-40 180.55

Financials (2.04%)

FDS FactSet Research Systems 233.39

Health Care (13.98%)

AMED Amedisys, Inc. 123.51

HRC Hill-Rom Holdings, Inc. 95.32

ICUI ICU Medical, Inc. 300.90

NVCR Novocure Limited 45.40

NUVA NuVasive, Inc. 69.57

QDEL Quidel Corporation 72.35

RARE Ultragenyx Pharmaceutical, Inc. 84.40

Industrials (17.95%)

CSL Carlisle Companies, Inc. 126.83

CPRT Copart, Inc. 65.10

FCN FTI Consulting, Inc. 75.25

GWR Genesee & Wyoming, Inc. 88.06

ODFL Old Dominion Freight Line, Inc. 165.35

SSD Simpson Manufacturing Company, Inc. 76.78

SXI Standex International Corporation 108.90

TDY Teledyne Technologies, Inc. 242.59

WSO Watsco, Inc. 175.95


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The Peroni Method®

The Peroni Method® is a proprietary form of technical analysis used by Eugene E. Peroni, Jr. of Peroni Portfolio Advisors, Inc. which uses a bottom-up approach in selecting stocks for certain AAM sector unit investment trusts. The foundation of this methodology is the basic understanding that every stock has its own “fingerprint” in the market place. Mr. Peroni tracks hundreds of stocks on a daily basis, identifying leading stocks and sectors in the market by analyzing price movements, money flow trends, and relative strength characteristics. His studies include the examination of a stock’s price architecture using hand-drawn point and figure charts which have been part of the methodology for over half a century. This hands-on research approach may be an attractive investment alternative to traditional fundamental analysis in that it considers a stock’s individual technical merits along with economic, monetary and geopolitical factors. The Peroni Method® may uncover emerging trends that could correspond to future stock performance. It has endured volatile markets while providing investors with uncommon insights and unique investment opportunities.

Key Points to Consider • According to Morningstar®, small and mid-cap stocks comprise about 35%* of the U.S. stock market’s total capitalization. As a group small

and mid-cap stock companies have historically experienced faster earnings growth than their large-cap counterparts, which may help generate

higher stock prices. Mid-cap companies may have the added benefit of greater financial strength and stability generally associated with larger-

cap companies. In addition, small and mid-cap companies are often viewed as potential M&A targets for private equity firms and larger

companies looking to accelerate growth, enhance competitive positioning or increase market share.1

• “Small-cap companies are likely to benefit significantly from lower corporate taxes especially given their higher effective tax rates compared to

large-caps. For small-caps with positive earnings, a drop in the effective corporate tax rate suggests a boost to earnings,” Venu Krishna, an

investment strategist at Barclays Capital, said. “Similarly, a reduction in personal taxes is likely to spur consumption thereby aiding the

domestic economy. The case for small over larger-cap companies is built around our view on their better relative valuations, greater exposure

to the domestic economic improvements and disproportionate benefits from policy actions,” said Krishna.2

• Since Election Day (11/8/16), the small-cap Russell 2000 Index has hit record highs. The President’s proposals are aggressively inward-

facing, which could bode well for companies with little foreign exposure. As a group, small-caps have far less exposure to foreign markets than

larger, multinational companies do.3

1 Morningstar, Investing in Small, Mid and Large-Cap Stocks, 4/14/2015 - *updated 2017 2 Newsmax Finance, Barclays: Small-Cap Stocks Will Rise 12 Percent in 2017, 11/23/2016 3 Forbes, Trump Win Makes Small Cap Stocks Great Again, 11/23/2016

Sector Breakdown*

% of Portfolio

Information Technology 26.21%

Consumer Discretionary 23.86%

Industrials 17.95%

Materials 14.01%

Health Care 13.98%

Financials 2.04%

Consumer Staples 1.95%

Source: Global Industrial Classification Standard (GICS) *As of 9/6/2018 and may vary thereafter. Breakdowns are based on the sources shown and may differ from any category definitions used in selecting the trust portfolio.

Source: Morningstar

% of Portfolio

Mid-Cap Growth 44.03%

Mid-Cap Value 6.03%

Mid-Cap Blend 18.08%

Small-Cap Growth 17.91%

Small-Cap Blend 9.93%

NA 4.02%

Holdings Style Summary*


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: 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 which 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. Concentration Risk: The risk that the value of your trust is more susceptible to fluctuations based on factors that impact a particular industry because the portfolio concentrates in securities issued by companies within that industry. Dividend Payment Risk: Dividends are not guaranteed and a company’s future abilities to pay dividends may be limited. Moreover, it should be clear that a company currently paying dividends may cease paying dividends at any time. Long-Term Strategy: The UIT matures in approximately 2 years and, as such, investors should consider their ability to reinvest any proceeds in a subsequent UIT, if available, with a like or differing strategy, at the applicable sales charge.

Peroni Method®: The Peroni Method® may not identify stocks that will satisfy the trust’s investment objective.

Small & Mid-Size Concentration: The trust is considered to be concentrated 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. ©2018 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.

This material is not intended to be a recommendation or investment advice, does not constitute a solicitation to buy or sell securities, and is not provided in a fiduciary capacity within the meaning of the Employee Retirement Income Security Act of 1974 (ERISA) and the Internal Revenue Code. The information provided does not take into account the specific objectives or circumstances of any particular investor, or suggest any specific course of action. Investment decisions should be made based on an investor’s objectives and circumstances and in consultation with his or her advisers.

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.

©2018 Advisors Asset Management Advisors Asset Management, Inc. (AAM) is a SEC registered investment advisor and member FINRA/SIPC.

18925 Base Camp Road | Monument, CO 80132 | www.aamlive.com | CRN: 2017-0919-6152 R Link 4932


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Gene Peroni - In The Media

Gene regularly appears on CNBC, Bloomberg Radio, CBS RadioNetwork, Fox Business Network,

MarketWatch, Nightly Business Report and Wall Street Journal Radio. He has been quoted in publications

such as The Wall Street Journal, The New York Times, U.S. News and World Report, Investor’s Business

Daily and Forbes. In addition, Gene produces a daily stock market commentary available in a concise, easily

accessible podcast.

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