The PENCE Recovery Portfolio is a unit investment trust (UIT) that primarily seeks capital appreciation by investing in a portfolio of stocks of companies believed to have been overly impacted by market volatility related to the coronavirus disease first detected in 2019 (“COVID-19”), and that are believed to be well positioned to have the opportunity to appreciate during an economic and market recovery over the next two years. There is no assurance the trust will achieve its objective.
The strategy started with stocks of companies with a U.S. base of operations that:
- fell significantly from their previous share price peak during recent market volatility;
- are consumer or business-related companies serving key demand segments;
- and have been impacted severely by the sudden restrictions imposed by government responses to COVID-19
These companies were then screened based on credit quality and potential access to funds made available through the recent Coronavirus Aid, Relief, and Economic Securities Act (“CARES Act”). From the companies identified, the portfolio was narrowed based on credit quality, corporate size, capital strength, long-term positive earnings improvement potential and analyst coverage.