RBC Canadian Dividend Fund Being a dividend-focused investor may not be as exciting as picking the hottest technology or big pharmaceutical stock, but for money manager Stu Kedwell it’s a stable way to make money over the long term.
“Some might say it’s kind of mundane … but it’s not going to be as volatile as some conventional equity investments,” says Mr. Kedwell, managing director, senior portfolio manager and co-head of North American equities at RBC Global Asset Management in Toronto, who oversees about $36-billion in assets.
The RBC Canadian Dividend Fund, which he co-manages, has returned 7.2 per cent over the past 12 months. Its three-year annualized return was 11.3 per cent and its five-year annualized return was 8.8 per cent. The performance is based on total returns, net of fees, for the Class F version as of Feb. 29.
The fund is 41 per cent financials, 18.5 per cent energy, 15 per cent industrials and the rest in sectors such as consumer staples and discretionary stocks, utilities and real estate.
What have you been buying?
One stock we’ve been adding to is George Weston Ltd. , which owns a majority stake in Loblaw Cos. Ltd. and Choice Properties Real Estate Investment Trust. Choice Properties may not be a fast-growing real estate entity, but it owns some of the best locations across Canada. We also think Loblaws will continue to grow at a healthy clip, driven in part by its Shoppers Drug Mart and No Frills brands.
We’ve also been buying West Fraser Timber Co. Ltd. after almost exiting the stock last fall. The company has a very strong balance sheet and we think it looks pretty interesting as interest rates begin decelerating and housing activity picks up again.