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3 top picks from Sentry’s Dennis Mitchell

Dennis Mitchell is executive vice-president and chief investment officer of Sentry Investments. His focus is on REITS, infrastructure and utilities.

Top picks:

Boston Properties Inc.
This owner, operator, developer and manager of AAA office buildings in Manhattan; Boston; Washington, D.C., and so on is trading below net asset value per unit with leverage to a recovering U.S. economy. It has best-in-class assets and management team.

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American Tower Real Estate Investment Trust
Cell towers are the perfect asset for the REIT structure. AMT has strong cash flow growth in the U.S. and even better growth in developing markets, amid a highly fragmented global market ripe for consolidation.

RioCan Real Estate Investment Trust
RioCan is the largest REIT in Canada trading at net asset value per unit with strong cash flow growth. It has leverage to U.S. retailers entering the Canadian market. Development and intensification opportunities will add to cash-flow growth potential.

Past picks: Feb. 14, 2012

H&R Real Estate Investment Trust
Then: $22.89
Now: $23.71
Total return: per cent

Brookfield Asset Management Inc.
Then: $31.10
Now: $38.63
Total return: +26.23 per cent

Mainstreet Equity Corp.
Then: $22.12
Now: $33.67
Total return: +52.22 per cent

Total return average: +29.11 per cent

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Market outlook:

Rates are likely to be on hold in North America through the end of 2014, extending the current favourable market for equities. Volatility is likely to remain elevated but the market appears to be looking past much of the legislative and political risk and focusing on operational performance. Global growth is likely to remain below the long term average as sovereigns and banks continue to de-lever. A portfolio of high quality businesses with strong cash flow and disciplined capital allocation is likely to continue to outperform over the long term.

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