dividend advantage portfolio (dap) · the dividend advantage portfolio (dap) is a unit investment...

EQUITY - DIVIDEND STRATEGIES

Series 2016-4Q, ADT 1740

Dividend Advantage Portfolio (DAP) Fee-Based Account UIT Fact Card

Investment Objective & Strategy The Dividend Advantage Portfolio (DAP) is a unit investment trust (UIT) that seeks to provide above-

average total return. Stocks are selected by Eugene E. Peroni, Jr. of Peroni Portfolio Advisors, Inc. (PPA)

for the portfolio by using a combination of the Peroni MethodTM, quantitative and fundamental analysis.

DAP is a uniquely derived portfolio that relies heavily, but not entirely, on technical analysis to identify

leading stocks with attractive yields. By combining a dividend-oriented screening process with the Peroni

Method’sTM technical approach, the strategy strives to give investors the advantage of identifying

companies that offer the potential for attractive distribution and growth.

In today’s stock market many dividend paying companies may offer notable and exiting growth

opportunities. DAP seeks to provide a strategically diversified portfolio of dividend paying stocks that offers

potential for above-average total return. The portfolio is constructed using a multi-cap, unconstrained

approach to stock selection. This non-formula based approach may reflect shifts in the market’s core

leadership as market conditions change, providing investors with participation in stocks of potential leading

sectors and industries.

Fee-Based CUSIP (Cash/Reinvest) Ticker Symbol

Ticketing Information

00776G205 / 213 DAPAPX

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

Essential Information+

$9.7550 $9.7550

11/21/2016 2/20/2018

Monthly $0.4471

+As of 11/18/2016 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. 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 Box TM

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

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Fee-Based Accounts Sales Charge and Expenses (Based on initial Fee-Based Account unit price of $9.755)++

Creation & Development Fee 0.51% $0.050

Organizational Costs + 0.39% $0.038

Total One-Time Expense 0.90% $0.088

Divided by Term of Trust equals Amortized One-Time Charges*

÷ 1.25 years ÷ 1.25 years

Amortized One-Time Charges 0.72% $0.070

Estimated Annual Operating Expense

+ 0.35% +$0.034

Estimated Average Amortized Annual Expenses

1.07% $1.04

++All amounts are as of 11/18/2016 and may vary thereafter. The

Creation & 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). The Organization Costs are fixed at $0.038 per unit

and are paid at the end of the initial offering period or after six months,

if earlier. The above table is for illustrative purposes only to illustrate

how estimated trust fees and expenses translate on an annualized

basis. The above does not reflect the amount or how all fees and

expenses will actually be paid. You should consult the prospectus for

a full description of applicable sales charges and expenses of the

trust, including those applicable to purchasers eligible for the fee-

based account discount. The one-time charges shown (the Creation

& Development Fee and Organization Costs) are paid on a one-time

basis as described and are not actually amortized over the life of the

trust. The amount shown for “Amortized One-Time Charges” are

calculated by taking the one-time dollar amounts and dividing them by

the anticipated life of the based on the trust’s inception date and

mandatory termination date. The “Estimated Average Amortized

Annual Expenses” is taken by adding the “Amortized One-Time

Charges” amount and “Estimated Annual Operating Expense”

amounts.

FOR USE ONLY WITH INVESTOR ACCOUNTS ELIGIBLE FOR THE “FEE-BASED ACCOUNT” SALES CHARGE DESCRIBED ON PAGE 4

Dividend Advantage Portfolio (DAP) Series 2016-4Q, ADT 1740

Intelligent Investments. Independent Ideas.

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Fee-Based Account UIT Fact Card


Portfolio Holdings (as of date of deposit)

Ticker Symbol

Issue Name

Market Value Per Share*

Information Technology (5.81%)

IBM International Business Machines $160.39

MXIM Maxim Integrated Products, Inc. 40.09

QCOM QUALCOMM, Inc. 67.31

Materials (7.66%)

CMP Compass Minerals International, Inc. 76.20

IP International Paper 48.45

LYB LyondellBasell Industries 83.12

SWM Schweitzer-Mauduit International, Inc. 42.27

Real Estate (11.52%)

CCI Crown Castle International 85.00

HST Host Hotels & Resorts, Inc. 16.41

IRM Iron Mountain, Inc. 31.55

LAMR Lamar Advertising 63.33

NHI National Health Investors, Inc. 70.29

PSA Public Storage 203.97

Telecommunication Services (7.71%)

T AT&T, Inc. 37.56

CTL CenturyLink, Inc. 24.79

RCI Rogers Communications, Inc. 38.14

VZ Verizon Communications, Inc. 48.07

Utilities (5.79%)

DUK Duke Energy Corporation 73.60

ETR Entergy Corporation 67.83

WEC WEC Energy Group, Inc. 55.53

*As of 11/18/2016 and may vary thereafter.

Ticker Symbol

Issue Name

Market Value Per Share*

Consumer Discretionary (13.38%)

CBRL Cracker Barrel Old Country Store, Inc. $155.27

GRMN Garmin Limited 51.71

IGT International Game Technology PLC 30.15

LVS Las Vegas Sands 60.59

RGC Regal Entertainment 23.69

SIX Six Flags Entertainment 56.23

TUP Tupperware Brands 58.90

Consumer Staples (5.77%)

BUD Anheuser-Busch InBev S.A. 101.88

BGS B&G Foods, Inc. 41.45

VGR Vector Group 21.16

Energy (9.58%)

BP BP PLC 33.64

CVX Chevron 109.20

RDS/A Royal Dutch Shell PLC 49.22

SFL Ship Finance International Limited 13.85

WNR Western Refining, Inc. 36.52

Financials (13.47%)

NLY Annaly Capital Management, Inc. 10.00

BLX Banco Latinoamericano de Comercio Exterior S.A.

28.88

BBT BB&T 44.49

CIM Chimera Investment 16.52

DX Dynex Capital, Inc. 6.83

TWO Two Harbors Investment 8.31

WFC Wells Fargo & 52.82

Health Care (3.85%)

GSK GlaxoSmithKline PLC 38.11

PFE Pfizer, Inc. 31.48

Industrials (15.46%)

AYR Aircastle Limited 22.31

BA The Boeing 146.35

CAT Caterpillar, Inc. 92.34

CMI Cummins, Inc. 135.03

PLOW Douglas Dynamics, Inc. 31.45

LMT Lockheed Martin 263.09

MIC Macquarie Infrastructure 81.34

QUAD Quad/Graphics, Inc. 26.48


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The Peroni MethodTM

1 PR Newswire, S&P Dow Jones Indices Reports U.S. Dividend Activity for Q3 2016, October 5, 2016

Dividend Update

Sector Breakdown*

% of Portfolio

Industrials 15.46%

Financials 13.47%

Consumer Discretionary 13.38%

Real Estate 11.52%

Energy 9.58%

Telecommunication Services 7.71%

Materials 7.66%

Information Technology 5.81%

Utilities 5.79%

Consumer Staples 5.77%

Health Care 3.85%

Source: Global Industrial Classification Standard *As of 11/18/2016 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

Country of Organization*

% of Portfolio

United States 78.86%

United Kingdom 7.70%

Bermuda 3.85%

Canada 1.93%

Panama 1.93%

Belgium 1.92%

Switzerland 1.91%

Netherlands 1.90%

Source: Bloomberg

S&P Dow Jones Indices announced at the end of the September 2016 that the indicated dividend net increases (increases less decreases) for U.S. domestic common

stocks totaled $6.0 billion during Q3 2016. This was a decrease from Q2-2016 which netted $7.3B. Howard Silverblatt, Senior Index Analyst at S&P Dow Jones Indices

noted, "Energy issues accounted for 39% of the dividend cuts and 33% of the dollar cuts in the third quarter, which is actually lower than last quarter's 43% and 71%

dividend and dollar cuts, respectively." 1 "Dividends remain one of the few alternatives available to income seeking investors, with most companies having the added kicker of being dividend-qualified for

taxes," said Mr. Silverblatt. While dividend increases for U.S. issues have continued to decline, the net result is still positive, Silverblatt added. And the pace of

dividend cuts ticked down in Q3, especially in the Energy sector. Dividend increases still more than outweigh the cuts, but dividend growth has slowed. Based on

current dividend policies, however, the U.S. equity market in 2016 is positioned to set another record in payments, especially in the S&P 500; the increase is seen as

being in the 5% range, but possibly not the double-digits seen in the past few years. 1

Holdings Style Summary*

% of Portfolio

Large-Cap Growth 7.64%

Large-Cap Value 32.77%

Large-Cap Blend 3.90%

Mid-Cap Growth 1.93%

Mid-Cap Value 11.52%

Mid-Cap Blend 9.62%

Small-Cap Growth 1.92%

Small-Cap Value 21.11%

Small-Cap Blend 9.59%

The Peroni MethodTM 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 MethodTM 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.




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 that 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. 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 15 months and, as such, investors should consider their ability to reinvest any proceeds in a subsequent UIT, with a like or differing strategy, at the applicable sales charge. Peroni MethodTM: The Peroni MethodTM may not identify stocks that will satisfy the trust’s investment objective. Small & Mid-Size Companies: 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. ©2016 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. For Use Only with Eligible Fee-Based Account Investors: During the trust’s initial offering period, investors who purchase units through registered investment advisers, certified financial planners or registered broker-dealers who in each case either charge investor accounts periodic fees for brokerage services, financial planning, investment advisory or asset management services, or provide such services in connection with an investment account for which a comprehensive “wrap fee” charge is imposed may be eligible to purchase units of the trust in fee-based accounts that are not subject to the transactional sales fee but will be subject to the creation and development fee that is collected by the sponsor (i.e. the “Fee-Based Account” sales charge). You should consult your financial advisor to determine whether you can benefit from these accounts and whether your unit purchases are eligible for this discount. To purchase units in these accounts, your financial advisor must purchase units designated with one of the Fee Account CUSIP numbers, if available. The amounts shown are different from what would be applicable for units purchased in other accounts (i.e. commission-based accounts) not eligible for this discount. See your prospectus and consult your financial advisor for more information about eligibility and applicability of the fee-based account discount. This communication may only be used with investors that are eligible for this discount. Securities offered 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.

18925 Base Camp Road Monument, CO 80132 www.aamlive.com ©2016 Advisors Asset Management, Inc. Advisors Asset Management, Inc. (AAM) is a SEC registered investment advisor and member FINRA/SIPC. CRN: 2016-1122-5652 R


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Gene Peroni - In The Media

Gene regularly appears on CNBC, CBS MarketWatch, Fox Business Network, PBS Nightly Business Report

and Bloomberg Radio. He has been quoted in publications such as The Wall Street Journal, The New York

Times, U.S. News and World Report, Investors Business Daily and Forbes. In addition, Gene produces a daily

stock market commentary available in a concise, easily accessible podcast.

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