Dividend Investing in Canada: 2016 Outlook

13 Jan
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Paula Medina

Renato Anzovino, CFA, Portfolio Manager and Vice President at Heward Investment Management Inc, recently appeared on BNN’s “Business Day/The Open” to discuss his 2016 outlook for dividend investing in Canada.

There are several major challenges facing the Canadian economy, including: the contraction of the energy sector, concerns over a housing bubble and the unemployment rate.

Despite these challenges however, we see room for optimism. Specifically in the consumer goods and services, telecommunications, technology and growth utilities sectors. Other positive variables include: the stability of the Canadian banking system, large government infrastructure project investments, a comparatively strong US economy and a weaker Canadian dollar, which favors exports.

The Heward Canadian Dividend Growth Fund invests in Canadian equities with a history of consistently growing dividends. The criteria for selection include: straight-forward business models, the provision of need-based products and services, long term earnings, visibility and predictability, and proven management teams that successfully increase cash flows and operate with low levels of leverage.

The Fund has offered superior performance and lower overall long term volatility than the Index. For the five-year period ending December 31st, 2015 the Fund had a return of 8.59% compared to its benchmark S&P TSX Index, which had a return of 2.30%. It is also important to note the Fund’s beta was 0.58, whereas the Index’s beta was 1.00 (also for five-year period ending December 31st, 2015). The ‘beta’ is a standardized calculation of systematic risk, based on fluctuation of returns relative to the overall market.

You can watch the interview here http://www.bnn.ca/Video/player.aspx?vid=775895 Please note it will take a few minutes to download.

As always, we appreciate your continued support and should you have any questions please contact us directly.