WHAT ARE WE LOOKING FOR?
How Canadian dividend funds have fared over time.
These funds, which are in the Canadian dividend and income equity category, invest mainly in income-generating securities with at least 70 per cent of assets in Canada.
We screened funds in this category to rank them by the best five-year records. Five years is a decent period that will include the depressing bear market of 2008 and early 2009. Segregated, U.S. dollar and duplicate versions of these funds were excluded.
WHAT DID WE FIND?
Stone & Co. Dividend Growth Class was the gem over the past five years.
The fund, which is run by Martin Anstee, posted an average annual return of 6.9 per cent, and was the only one to beat the S&P/TSX Total Return Index average annual return of 6.5 per cent.
"We choose stocks that not only pay dividends, but increase dividends over time," said the manager at Stone Asset Management Ltd. He looks for growth stocks trading at reasonable prices, and limits any sector to 20 per cent to provide diversification.
There is currently about 19 per cent of the fund in each of the financial and energy sectors; 9 per cent in materials and also 14 per cent in cash. "I am not finding many stocks that are good value," he said.
In early 2008, he held an even higher 22-per-cent position in cash, which he later plowed into quality stocks during the stock market meltdown later that year.
For Mr. Anstee, core holdings over the years have included names like Canadian Natural Resources, Canadian National Railways, Canadian Pacific, Thomson Reuters and Brookfield Asset Management.
Lower fees, meanwhile, have helped other funds like TD Dividend Growth, RBC Canadian Dividend and Beutel Goodman Canadian Dividend. Their returns over five years ranged from 5.5 to 4.7 per cent.
Hartford Canadian Dividend Growth posted an average annual return of 4.7 per cent over the same period. This fund is run for Hartford Investments by Regina-based Greystone Managed Investments.
The fund holds a concentrated portfolio of 25 names that represent a 4-per-cent weighting each. The focus is on growth companies able to increase their earnings, and have consistent and stable dividends, said Jeff Israel, analyst with Hartford Investments.
The highest sector weighting in the fund is now in financials at around 40 per cent, while energy is 25 per cent and utilities is 8 per cent. "The financials are primarily in the banks as well as two real estate investment trusts, IGM Financial Inc. and Intact Financial (formerly ING Canada)," he said.
|How Canadian dividend & income funds are faring over five years|
|(As of Jan. 31)||Latest||% rtn to Feb. 28||Calendar year % returns|
|Fund name Assets ($-mil)||MER||5-yr||YTD||2009||2008||2007||2006||2005|
|Stone & Co. Div Growth Cls Can A||183.7||2.86||6.9||-1.2||25.6||-22.9||9.4||13.9||23.8|
|TD Dividend Growth||3,577.8||1.92||5.5||-0.8||32.8||-29.9||1.3||15.9||23.8|
|RBC Canadian Dividend||9,726.0||1.70||5.4||-0.2||27.3||-27.0||3.0||15.1||21.1|
|Beutel Goodman Canadian Dividend||10.7||1.41||4.7||0.6||16.9||-20.6||4.2||15.3||15.0|
|Hartford Canadian Dividend Growth B||219.6||2.60||4.7||0.4||24.6||-26.5||0.3||15.6||24.2|
|Bissett Canadian Dividend-A||167.3||2.36||4.6||0.3||33.5||-25.6||5.1||4.5||18.7|
|CIBC Dividend Growth||857.2||1.96||4.5||-0.1||28.1||-29.1||6.4||12.1||20.3|
|Scotia Canadian Dividend||2,212.1||1.66||4.4||-1.0||26.0||-27.7||6.5||12.8||19.4|
|AGF Dividend Income||568.6||2.11||4.0||1.3||25.1||-28.0||0.4||9.9||25.8|
|Ethical Canadian Dividend||237.9||2.52||4.0||0.4||20.0||-27.2||1.5||14.2||26.5|
|PH&N Canadian Equity-D||831.8||1.12||3.8||-0.9||34.9||-35.5||5.3||15.6||19.0|
|Manulife Dividend Fund||521.3||2.30||3.6||0.8||32.3||-27.0||1.0||9.3||15.4|
|Hartford Canadian Dividend B||121.8||2.60||3.6||0.2||14.9||-21.4||5.1||12.6||13.7|
|Northwest Canadian Dividend||115.0||2.58||3.4||0.3||16.4||-21.5||3.1||12.9||13.2|
|CI Signature Dividend||1,440.1||1.79||3.3||0.7||32.1||-23.0||-5.1||10.8||11.7|
|BMO GDN Dividend Growth Mutual||448.7||2.00||2.9||-1.8||19.2||-27.1||1.3||13.6||20.1|
|Sceptre High Income-A||43.7||1.67||2.8||-0.6||28.0||-31.5||7.9||8.1||21.1|
|IA Clarington Canadian Dividend||1,114.3||2.72||2.5||-2.0||28.3||-28.1||3.3||15.3||8.6|
|PH&N Dividend Income-D||1,975.4||1.11||2.4||0.5||33.0||-32.5||-3.9||16.5||13.6|
|HSBC Dividend Income-I||434.5||1.92||2.3||-2.0||28.1||-29.9||1.4||10.4||17.2|
|Standard Life Cdn Dividend Growth-A||1,478.5||2.01||1.9||-2.0||22.4||-33.1||4.2||12.0||21.4|
|AIC Dividend Income||132.8||2.42||1.8||0.8||25.1||-27.0||-4.7||7.5||20.2|
|Renaissance Cdn Dividend Income||155.0||2.35||1.6||-0.2||18.4||-28.9||4.6||8.2||18.2|
|Renaissance Millennium High Income||512.7||2.38||1.5||1.3||21.9||-31.5||5.3||2.9||24.6|
|Mackenzie Maxxum Dividend Growth||920.9||2.38||1.5||0.2||26.1||-28.2||-3.0||13.8||9.4|
|Acuity Growth and Income||225.5||2.91||1.2||-0.8||28.0||-29.9||-6.0||7.8||24.5|
|IA Clarington Dividend Inc-T4||283.1||1.89||1.2||-1.0||20.1||-27.8||0.9||10.5||14.7|
|IG Mackenzie Maxxum Dividend Gro-C||969.3||2.85||0.9||0.0||25.4||-28.6||-3.5||13.3||8.2|
|Mackenzie Maxxum Dividend||1,414.3||2.38||0.5||0.4||27.4||-30.8||-1.9||12.6||7.5|
|S&P/TSX Composite Index||3.8||-1.0||30.7||-35.0||7.2||14.5||21.9|
|S&P/TSX Total Return||6.5||-0.6||35.1||-33.0||9.8||17.3||24.1|
|Source: Globe Investor|
© 2007 The Globe and Mail. All rights reserved.
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