Skip to main content

The Globe and Mail

15 funds that cater to the yield-hungry investor

Market Analyze

kai zhang/Getty Images/iStockphoto

What are we looking for?

Low interest rates over the past few years have driven yield-craving investors toward Canadian dividend and income equity funds. Which funds fared the best in the past year?

The screen

Story continues below advertisement

We looked for the best performers in the asset class for the year ended March 31. U.S. dollar, segregated and duplicate versions of the funds were excluded.

What did we find?

In an asset class that has seen positive fund flows and benefited from relatively strong markets, all the funds in the screen beat the S&P/TSX Total Return index by a healthy margin.

The Trimark Canadian Plus Dividend Class posted the strongest return, with an annualized gain of 22.3 per cent. The fund has 70 per cent of its holdings in Canada, 14 per cent in the U.S. and the rest spread internationally.

A contrarian attitude has helped the Trimark fund's performance. "We've been more or less fully invested over the past few years, so where some people were running scared of the market, we saw opportunities and took advantage of them," said Rory Ronan, vice-president of Trimark Investments and one of the fund's three managers.

While Canadian dividend and income equity funds do get some of their returns by way of dividends or distributions, they also tend to move with the stock market. But Mr. Ronan said he's more concerned with individual stocks than the macro picture.

"Paying attention to the balance sheet and valuations – that makes sure you protect the downside," he said.

Story continues below advertisement

The strategy paid off when the fund heavily weighted Progress Energy Resources Corp. before it was bought by the Malaysian state-owned energy company Petronas. A year ago, amid low gas prices, Progress's valuation was discounted and Mr. Ronan and his team thought the time was right to invest.

Other companies such as U.S.-based media and tech company Comcast Corp., and paper and lumber company West Fraser Timber Co. Ltd., both helped boost the fund's performance.

Looking ahead, the firm is sharpening its pencils and looking closely at resource stocks in Canada. The sector has struggled in the past couple of years but Mr. Ronan said he has started to see more opportunities in the resource space.

Report an error Licensing Options
About the Author
Financial Services Reporter

Jacqueline Nelson is a financial services reporter at the Report on Business. Prior to that she was a staff writer at Canadian Business magazine, covering news and writing features on a wide variety of subjects. More


The Globe invites you to share your views. Please stay on topic and be respectful to everyone. For more information on our commenting policies and how our community-based moderation works, please read our Community Guidelines and our Terms and Conditions.

We’ve made some technical updates to our commenting software. If you are experiencing any issues posting comments, simply log out and log back in.

Discussion loading… ✨