Strategies

Enhanced Dividend Fund

How many managers have managed to outperform the TSX Dividend Aristocrats Index?

Only 12.1%.

Copy Cat Strategies

The following table contains the top 10 holdings for three of the largest Canadian dividend-focused funds as well as the top 10 weights in the TSX Composite Index.

(as at July 2018)

Top 10 Holdings

fund a	fund b	fund c	tsx composite index
Toronto Dominion Bank	Royal Bank of Canada	Toronto Dominion Bank	Royal Bank of Canada
Royal Bank of Canada	Toronto Dominion Bank	Royal Bank of Canada	Toronto Dominion Bank
Suncor Energy Inc.	Bank of Nova Scotia	Bank of Montreal	Enbridge Inc.
Bank of Nova Scotia	Cash & Cash Equivalents	Bank of Nova Scotia	Canadian Natural Railway Co.
Microsoft Corporation	Canadian Natural Railway Co.	CIBC	Bank of Nova Scotia
TransCanada Corporation	Brookfield Asset Management Inc.	Brookfield Asset Management Inc.	Suncor Energy Inc.
Canadian Natural Resources Limited	Enbridge Inc.	Enbridge Inc.	Bank of Montreal
Canadian Pacific Railway Limited	Bank of Montreal	Canadian Natural Railway Co.	TransCanada Corporation
Enbridge Inc.	Manulife Financial Corporation	Suncor Energy Inc.	Brookfield Asset Management Inc.
Brookfield Asset Management Inc.	TransCanada Corporation	TransCanada Corporation	BCE Inc.

Top 10 Holdings of all four portfolios Top 10 Holdings in three of the four portfolios

There are no less than six companies that feature in each fund’s top 10 holdings as well as the TSX Composite Index. Moreover, there are an additional three companies that are top 10 holdings in three of the four portfolios.

Using AI to create a new approach to dividend investing

We use a unique approach to achieve the following objectives:

01. To produce a gross, tax-preferred dividend yield of approximately 4 - 4.5%.
02. To exhibit 20% lower volatility than the TSX Composite Index.
03. To generate higher total returns over the long-term than the (seemingly unbeatable) TSX Dividend Aristocrats Index.

Achieving these results means our portfolio differs significantly from its conventional counterparts. This has resulted in significant outperformance, both on an absolute return and on a risk-adjusted return basis. Our Atypical Portfolio Construction

step 1
Apply Preliminary Screen
Companies Must Exhibt
Liquidity
150 most liquid TSX companies
Consistency
No dividend cuts in past 5 years
Dividend increase in at least 3 of past 5 years
step 2
Generate Stock Weights
Generate Stock Weights
Higher ratio of yield to volatility = more weight
Lower ratio of yield to volatility = less weight
step 3
Apply Risks Constraints
Apply Risks Constraints