Dynamic Canadian Dividend Fund

Analysis: This is a fund that has undergone some pretty big changes in the past few years. In 2011, David Fingold took the lead after the departure of David Taylor. With Mr. Fingold at the helm, the fund has focused more on high quality companies that can pay and grow dividends that are trading at deep discounts to their true value.

With this approach, I expect that we will see the downside protection increase dramatically, a trait that is quite common with other funds managed by Mr. Fingold. An unfortunate drawback to his style is that it is also quite likely that the upside participation will also drop dramatically. We are seeing signs that this is in fact occurring.

Under Mr. Taylor, the fund tended to be quite volatile, particularly for a dividend focused fund. That has come down under Mr. Fingold, and I expect that to continue.

The portfolio itself is very focused in the large cap names, and the top ten is filled with familiar names including Power Corp, Bank of Nova Scotia, and EnCana. It pays a monthly distribution of $0.05, which works out to an annualized yield of about 4.4%.

Performance has really lagged in the past few years. For the three years ending December 31, it generated an annualized return of 1.9%, while the index did 3.4%. It trailed its competition by an even more substantial margin. Going forward, I don’t see much on the horizon that leads me to believe that there will be a significant improvement in performance. I definitely think that there are better dividend focused options available. Within the Dynamic family, I’d prefer the Dynamic Dividend Fund (DYN 048), managed by Oscar Belaiche and Jason Gibbs over this offering.