What we're looking at
It's Day Three of our week-long look at how the mutual funds that were massacred last year have done in 2009. Today, dividend funds.
Funds in the Canadian dividend and income equity category with assets of $25-million or more were ranked according to the size of their losses in 2008. To see how each fund has rebounded, we've displayed the return for the year through Nov. 26.
For a longer-term view on the performance of these funds, we have included five-year quartile numbers. Quartiles divide funds in a category into four groups; first quartile is best, fourth is worst.
What we found
Think owning dividend stocks will provide some cushioning when stock markets plunge? Don't count on it.
The funds in today's screen are loaded with all kinds of blue-chip, dividend-paying stocks, and many of them got beat up last year. It's worth noting that the S&P/TSX composite total return index, with roughly half its assets in resource stocks that pay little or nothing in dividends, fell 33 per cent last year. A few of our funds lost more than that, and many were only modestly better.
It's interesting to see a couple of names on this list from Phillips, Hager & North, a conservative money manager owned by Royal Bank. It's similarly interesting to see a few dividend-focused exchange-traded funds (ETFs), which are index funds that trade like stocks. One of the criticisms made against ETFs is that they do worse in a bear market than do traditional mutual funds. Our list shows us that ETFs (look for the iShares and Claymore names) and traditional funds were both big losers last year. It also shows that dividend ETFs bounced back exceedingly well in 2009. Better, in fact, than pretty much all of the mutual funds on the list.
ETFs have no permanent advantage, though. Globefund.com shows us that dividend funds averaged 9.7 per cent annually over the past 15 years to Oct. 31, compared to 8.6 for the S&P/TSX composite total return index (dividends included).
|Dividend Funds as of Nov. 26, 2009|
|Assets ($-mil)||Latest||% rtn||% rtn||Quartile|
|Fund name (as of Oct. 31)||MER||2008||Nov. 26||Oct. 31|
|PH&N Canadian Equity-D||820.8||1.12||-35.5||29.5||1|
|iShares CDN Value Index||38.3||0.50||-34.0||38.2|
|Standard Life Cdn Dividend Growth-A||1,507.0||2.01||-33.1||18.3||3|
|PH&N Dividend Income-D||1,943.8||1.11||-32.5||27.2||3|
|Renaissance Millennium High Income||511.1||2.36||-31.5||15.1||4|
|Investors Cdn Dividend Growth C||38.2||2.85||-31.2||18.5|
|iShares CDN Dividend Index||462.5||0.50||-30.9||31.1|
|Mackenzie Maxxum Dividend||1,394.4||2.38||-30.8||23.5||4|
|VPI Cardinal Canadian Equity Pool||174.9||2.14||-30.8||29.0|
|Claymore S&P/TSX Cdn Dividend ETF||89.6||0.64||-30.4||31.2|
|TD Dividend Growth||3,341.8||1.92||-29.9||28.7||1|
|HSBC Dividend Income-I||426.8||1.92||-29.9||24.0||3|
|Acuity Growth and Income||231.5||2.91||-29.9||24.0||3|
|CIBC Dividend Growth||830.7||1.96||-29.1||23.8||1|
|Renaissance Cdn Dividend Income||148.6||2.34||-28.9||14.8||3|
|Standard Life Dividend Income-A||38.7||2.44||-28.8||13.2|
|IG Mackenzie Maxxum Dividend Gro-A||962.0||2.68||-28.5||22.0||4|
|Mackenzie Maxxum Dividend Growth||918.9||2.38||-28.2||22.4||4|
|IA Clarington Canadian Dividend||1,153.2||2.72||-28.1||24.4||2|
|AGF Dividend Income||566.3||2.06||-28.0||21.1||1|
|IA Clarington Dividend Inc-T4||282.7||1.89||-27.8||16.4||4|
|Scotia Canadian Dividend||2,118.1||1.66||-27.7||21.5||1|
|Ethical Canadian Dividend||227.6||2.59||-27.2||13.7||1|
|BMO GDN Dividend Growth Mutual||466.3||2.00||-27.1||15.6||2|
|AIC Dividend Income||134.9||2.42||-27.0||19.6||4|
|Source: Globe Investor|
© 2007 The Globe and Mail. All rights reserved.
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