This dividend-focused offering is
managed by the same team
using the same process used for the highly-regarded
Leith Wheeler Canadian Equity Fund
(LWF002). They use a value-focused, bottom-up approach that looks for high
quality, conservatively-financed companies that generate attractive returns
on capital, and that are trading below what they believe them to be worth.
The portfolio is concentrated, holding around 40 names, with the top 10
making up 47% of the fund.
Current top holdings as of Jan. 31 included
Bank of Nova Scotia (TSX: BNS),
Royal Bank of Canada (TSX: RY),
Brookfield Infrastructure Partners LP (TSX: BIP.UN),
Canadian Imperial Bank of Commerce (TSX: CM), and
Canadian National Railway Co. (TSX: CNR).
Given the dividend focus, it is not surprising to see the fund overweight
in high-yielding financial services names, with a 52% portfolio allocation
to the sector, and with very little exposure to materials and healthcare.
The managers tend to be a little more active with this fund than they are
with the broader Canadian equity mandate. Over the past five years,
portfolio turnover has been roughly double that of their flagship fund,
averaging more than 75% per year.
Performance has been strong, with the fund posting an average annual
compounded rate of return of 11.1% for the five years ending January 31,
while the broader S&P/TSX Composite Index delivered 7.5%. Volatility
has been in line with the market. Capital protection has been strong, with
the fund participating in just over two thirds of the market downside.
Perhaps the biggest drawback to this fund is its high minimum investment of
$25,000 when purchased direct through Leith Wheeler, putting it out of
reach for those with smaller accounts. Still, for those with moderate
account balances, it is a great core Canadian equity offering.
Leith Wheeler Investment Counsel
Canadian Dividend & Income Equity
Large Cap Value
Leith Wheeler Canadian Equity Team
LWF019 (no load)
$25,000 direct through Leith Wheeler
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.
Notes and Disclaimer
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associated with fund investments. Please read the simplified prospectus
before investing. Mutual funds are not guaranteed and are not covered by
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insurer. There can be no assurances that the fund will be able to maintain
its net asset value per security at a constant amount or that the full
amount of your investment in the fund will be returned to you. Fund values
change frequently and past performance may not be repeated. No guarantee of
performance is made or implied. This article is for information purposes
only and is not intended as personalized investment advice.