Matco Canadian Equity Income Fund (Series F)
Fund Documents [LINK]    Fund Codes [LINK]     As at March 31, 2022

Investment Profile
The Fund invests in mid to large-cap leading Canadian dividend-paying companies and is diversified across sectors. The Fund seeks to generate regular dividend income plus long-term capital appreciation.

Fund Inception Date

2007

Fund Net Asset Value

$96.0 Million

Portfolio Manager

Anil Tahiliani, MBA, CFA

Dividend Yield

3.0%

Is this fund for you?

You typically have a 5+ year investment horizon

You can tolerate medium risk on your investment

You are looking for an investment that is well diversified and pays a dividend

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Geographic Profile

Canadian-focused
The Fund is primarily focused on Canadian equities maintaining a minimum of 70% in Canadian securities. It may also invest from time to time in U.S. and foreign securities based upon Matco's assessment of market conditions.

Canadian Equity Geographic Profile 21Q3

Strategy

The fund invests in a focused portfolio of 30-35 highest conviction companies.

The fund focuses on companies that meet Matco’s strict investment criteria which include:

  • Quality

  • Income

  • Growth

  • Value

  • Risk

Investor Education

  • Ensure you have an investment time horizon of 5+ years

  • Understand that at times the fund’s performance may be out of sync with the market

  • The companies’ earnings growth cycle may fluctuate over time

  • Learn about Matco and our investment philosophy

  • Assess the fund’s performance over a 5-year period in order to recognize the fund’s true value

  • Understand this Fund is not intended to be a complete investment program for all investors

Performance (Series F)

As at March 31, 2021    
Annualized
Net of Fees 3M YTD 1Y 3Y 5Y 7Y 10Y Incep.
Series F 4.0% 4.0% 17.2% 10.5% 6.9% 6.4% 7.4% 5.4%

Growth of $10,000 since inception

Canadian Equity Growth of $10,000 21Q3

Cumulative Returns

    3M YTD 1Y 3Y 5Y 7Y 10Y Incep.
Series F   4.0% 4.0% 17.2% 34.8% 39.8% 54.7% 103.9% 111.6%

 

  • Calendar Year Returns

      2021 2020 2019 2018 2017 2016 2015 2014 2013 2012 2011 2010 2009 2008 2007
    Series F 22.8% -1.2% 18.4% -13.7% 9.4% 14.6% -2.5% 6.7% 18.1% 7.2% -7.3% 16.6% 31.1% -31.6% 2.4%
  • Rolling 5-Year Returns

      From 2016
    to 2021
    From 2015 
    to 2020
    From 2014
    to 2019
    From 2013
    to 2018
    From 2012 
    to 2017
    From 2011
    to 2016
    From 2010
    to 2015
    From 2009 
    to 2014
    From 2008 
    to 2013
    From 2007 
    to 2012
    Series F 6.3% 4.8% 4.6% 2.4% 9.0% 8.6% 4.1% 7.9% 12.4% 0.8%
  • Annual Distribution per Unit ($/unit)

      2021 2020 2019 2018 2017 2016 2015
    Income 0.22 0.02 0.59 0.40 0.34 0.28 0.29
    Capital Gains 0.08 0.30 - 0.24 - -
    Total Distributions: 0.30 0.02 0.89 0.40 0.58 0.28 0.29

Sector Allocation 

Candian Equity Sector Allocation 21Q3

Asset Mix

Canadian Equity Asset Mix 21Q3

Top Holdings

Canadian Dollar 5.2%
Loblaw Companies Ltd. 4.3%
Nutrien Ltd. 4.3%
Canadian National Railway Co. 3.9%
Great-West Lifeco Inc. 3.8%
Rogers Communications Inc. CLB NV 3.7%
ATS Automation Tooling Systems Inc. 3.6%
Waste Connections Inc. 3.5%
Ritchie Brothers Auctioneers Inc. 3.4%
CP Railway Ltd. 3.3%
  • 5.2% - Canadian Dollar

  • 4.3% - Loblaw Companies Ltd.

    Canada’s largest food and pharmacy leader with 2,400 stores under various banners including Loblaws, Real Canadian Superstore and Shoppers Drug Mart.

  • 4.3% - Nutrien Ltd

    A global producer of potash, nitrogen and phosphate products for the agricultural and industrial markets.

  • 3.9% - Canadian National Railway Co.

    Offers transportation and supply chain expertise across North America.

  • 3.8% - Great-West Lifeco Inc.

    Financial service company offering life and health insurance, retirement and asset management and reinsurance.

  • 3.7% - Rogers Communications Inc. CLB NV

    Provides internet, wireless, cable and security services and owns the Toronto Blue Jays and other media assets.

  • 3.6% - ATS Automation Tooling Systems Inc.

    Global provider of automation and integration solutions for various industries.

  • 3.5% - Waste Connections Inc.

    North America's third-largest solid waste services company serving Canada and the United States.

  • 3.4% - Ritchie Brothers Auctioneers Inc.

    Provides a global platform to buy and sell heavy equipment, trucks and other assets.

  • 3.3% - CP Railway Ltd.

    Offers transportation and supply chain expertise across North America.

Outlook

As we expected the Bank of Canada has started raising short-term interest rates to tame decades high inflation. The central bank stated that it is willing to aggressively move rates higher to the neutral rate of 2-3% to get inflation under control. In addition, the bank will stop purchasing government bonds to keep interest rates artificially low. The Bank has quickly switched its focus from full employment to inflation-fighting.

The central bank is also trying to talk down inflation which is difficult to do, as a result, its trying to walk a fine line between raising rates and yet not causing the economy to quickly slow down or tip into a recession.

We expect stock markets to remain choppy for the rest of the year as investors adjust to slower economic growth from rising rates. We still expect overall inflation to decline, however likely not until 2023. Canadian corporate earnings should remain intact given our resource-based economy.

The Fund continues to be positioned for a rising rate environment with the largest sector weights being Financials, Industrials, Telecommunications and Energy. These sectors are well-positioned to benefit from an investor rotation into companies with more realistic earnings and lower valuation metrics.

Over the past quarter, many of our portfolio holdings announced double-digit dividend increases and we expect the same in 2022, as corporate balance sheets remain flush with cash. The Fund continues to have an underweight position in the Energy and Materials (gold and silver) sectors. Despite a 3% dividend yield, the Fund is trading at a lower valuation than the overall Canadian stock market.

Performance returns for the Matco Mutual Funds are calculated by Matco Financial Inc. These returns are calculated and reported in Canadian dollars and are historical simple returns for the 3 month, YTD and 1 year periods and annualized compounded total returns for periods after 1 year. They include changes in unit value and reinvestment of all distributions and do not take into account sales, redemption, distribution or optional charges or income taxes payable by any security holder that would have reduced returns. A cumulative return on an investment is the aggregate amount that the investment has gained or lost over time, independent of the amount of time involved, expressed as a percentage. Calendar year return reflects the compound rate of return over the specified calendar year (January 1st to December 31st). Matco Fund returns are calculated after management fees and operating expenses have been deducted.