| Fund Company | Dynamic Funds |
| Fund Type | Canadian Focused Equity |
| Rating | $$$ |
| Style | Blend |
| Risk Level | Medium |
| Load Status | Optional |
| RRSP/RRIF Suitability | Good |
| TFSA Suitability | Good |
| Manager | Cecila Mo since October 2011 |
| MER | 1.57% |
| Code | DYN 054 – Front End Units DYN 056 – DSC Units |
| Minimum Investment | $500 |
Analysis: After longtime manager David Taylor left Dynamic in October 2011 the reins of this fund were handed over to Cecilia Mo. Along with the new manager, it also got a new name, when it was renamed the Dynamic Dividend Advantage Fund, losing its old moniker, the Dynamic Dividend Value Fund.
This is a fund whose mandate is right in the wheelhouse of Cecilia Mo in that it focuses on dividend paying stocks including high yielding commons stocks, REITs and Trusts. In selecting the investments for the fund, she uses a fundamentally driven, bottom up approach that considers both the long term growth factors of a company with the current macro environment.
The portfolio is fairly diversified, holding around 50 names with the top 10 making up about 40% of the fund. While the focus is on dividend paying stocks, four of the top ten names were REITs on September 30. The two biggest sectors are financials and energy, which combined make up 60% of the fund. Most of that financial exposure is REITs, rather than financial services.
Performance since she took over has been strong, gaining 11.8%, outpacing both the index and the category by a wide margin. Since taking over, she has made some changes to the fund. For example, the average market capitalization of the fund has dropped, but the number of names in the fund has increased. Considering this, we expect that volatility will remain similar to what it was under David Taylor’s tenure.
It pays a variable quarterly distribution, but the yield is very low, which limits its effectiveness as a reliable source of income. For those looking to receive regular cash flow, it is available in a T-Series which will pay out monthly distributions which will approximate a yield of 8%. Costs are also very reasonable, with one of the lowest MERs in the category, coming in a 1.57%. All things considered, this is a great fund for investor looking for a portfolio of companies that offer an attractive underlying yield without taking on significant volatility risk.