DRIP Index MP 63 Since 1994
The Moneypaper a financial newsletter, created a DRIP Index at the start of 1994 to track a representative sampling of companies that offer dividend reinvestment plans (or DRIPs). The results of the DRIP Index were compared with the other popular Indices every day starting from inception in 1/1/1994 through 5/22/2017. The results after 23 years were as follows:
In 1999, a mutual fund was organized to invest in the companies in that index. The MP 63 Fund (DRIPX) is managed by the Moneypaper team--direct investment plans or DRIPs authority for more than three decades.
Dear Fellow Shareholders,
Here are the rules we set to guide our investing:
By purchasing more shares of the companies in our portfolio on a steady basis, and selling rarely, we feel our method is similar to dollar-cost averaging into what we believe are the best companies in a diverse group of industries. Among many other leadership indicators, these companies all offer their shareholders the benefit of a direct investment plan.
We attempt to maintain our allocation among our portfolio components by taking profits from companies when they represent too large a position in the portfolio, and using the proceeds to build up companies that are depressed. We use the dividends paid by each company to make additional contributions into that company. We believe this approach takes advantage of market volatility.
The stocks in our portfolio represent a wide range of industries, and have the advantage of size and market leadership. This allows us to spread investment risk over both time and component allocation. Also, this posture allows us to limit turnover, which would burden shareholders with unnecessary and unwanted capital gains distributions (and taxes).
We constantly review the companies in the fund. If a company were to no longer fulfill its role in our portfolio, we would replace it. We are happy to report that both our method of investing and our stock selections are on course to produce the results we desire.
Many of you have been taking advantage of the automatic investing option to increase your holdings. This is an important part of the steady inflow of new cash that fuels asset growth.
Thanks to our disciplined shareholders, we've never had to sell stock to meet redemption requests, a problem that plagues some more conventional funds during bear markets. Such shareholder conduct has allowed us to take advantage of market declines to buy more shares.
We want to thank you for your comments and questions. As managers, we will continue to be accessible and responsive and we encourage you to join us in a regular program of investing in the fund over the long term.
Vita Nelson and Mario Medina, Co-Managers
An Automatic Investment Plan does not assure a profit and does not protect against a loss in declining markets. A dollar-cost averaging strategy involves continuous investment in securities regardless of fluctuations in price levels of such securities. The investor should consider his financial and emotional ability to continue purchases through periods of high and low price levels. The MP 63 Fund does not strictly follow a dollar-cost averaging strategy because the investments it makes are controlled by the investment amounts it receives from its shareholders.