With an all-cap mandate, at Sept. 30, the fund was 58% invested in Canadian
equity, 21% in U.S. equity, 8% in international equities, and the balance
in cash and other assets.
The managers’ process analyzes the quality and risks of a potential
investment by scoring each company on several factors, including stability
and level of earnings power, managerial skill and ownership, and financial
leverage. This generates the inputs for an estimate of fair value, which in
turn helps to determine buy and sell prices. A deeper due diligence review
is conducted on the most attractive opportunities, including meetings with
The portfolio is built as if the managers were putting together a
conglomerate company. They strive to ensure there is significant
diversification across business risk and return drivers. Each company has a
role to play in the portfolio.
The managers are also very active in managing position sizes, and will buy
and sell based on the difference between the stock price and their estimate
of its real worth.
The portfolio consists of roughly 60 names, with the top 10 making up about
45% of assets. It is overweight consumer services, technology, and
industrials, and significantly underweight healthcare and basic materials,
giving it a much different profile than the typical Canadian equity fund.
Performance both over both the long and short term has been excellent. In
2017, the fund delivered a 26.5% return, and boasts a 5-year average annual
compounded rate of return of 12.7% as of Sept. 30.
Because the portfolio is more concentrated, differing considerably from the
index, the fund has been more volatile. But even with the higher
volatility, it has done a great job protecting capital in down markets.
Although I still lean towards its sister Manulife Fundamental Dividend
Fund, this one is a good option and can be a great core holding for
investors with an above-average tolerance for risk.
Manulife Dividend Income Plus Fund
Canadian Focused Equity
Duncan Anderson since July 2012; Alan Wicks since July 2012
MMF4548 (Front-end load)
Dave Paterson, CFA, is the Director of Research, Investment Funds for
D.A. Paterson & Associates Inc., a consulting firm specializing in providing research and due
diligence on a variety of investment products. He is also the publisher
Dave Paterson’s Top Funds Report,
offering regular commentary and in-depth analysis of Canada’s top
investment funds. He uses a unique analytical approach to identify
funds with strong, risk-adjusted returns, and regularly publishes his
insights and analyses in Fund Library.
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only and is not intended as personalized investment advice.