| Fund Company | Mackenzie Financial Corporation |
| Fund Type | Canadian Dividend and Income Equity |
| Rating | C |
| Style | Value |
| Risk Level | Medium |
| Load Status | Optional |
| RRSP/RRIF Suitability | Fair |
| TFSA Suitability | Fair |
| Manager | Norman Raschkowan since July 2010 Dinka Kucic since July 2010 |
| MER | 2.50% |
| Code | MFC 1531 – Front End Units MFC 1630 – DSC Units |
| Minimum Investment | $500 |
Analysis: As part of Mackenzie’s reorganization of its sprawling fund family, this dividend focused offering, which was formerly the Mackenzie Maxxum Dividend Fund was renamed to the Mackenzie Canadian Large Cap Dividend Fund.
In order to be considered for inclusion in this fund, a stock must have a dividend yield of at least 1%, and a market capitalization of at least $1 billion. They also must have a strong management team, be financially sound with a history of solid earnings growth. The result is a fairly diversified portfolio that holds anywhere from 45 to 65 names. Currently it is holding 60, with the top ten representing 42%.
It can invest up to 30% in foreign stocks. They are taking advantage of that option, as nearly 26% is invested abroad, with the lion’s share in the U.S.
Like other dividend type funds, it has a bit of a value tilt to the portfolio. Not surprisingly, financials and energy represent more than half of the portfolio, given their above average yields. All of the big five banks are in the top ten holdings.
In a recent commentary, the managers stated that they believe that dividend yields remain attractive. It is their view that investors demand for yield and the expected rotation out of fixed income into higher yielding equities will provide an underpinning of support and allow for upside potential.
While that may be their outlook, their past performance has largely been disappointing. More often than not, it has been in the bottom half of the category.
Considering the above, this is not a fund that we would recommend. We expect that performance will be middle of the pack at best and volatility will also be about average. Factor in an MER of 2.50% and we believe that there are better choices available.