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Analysis: This fund falls into the “what have you done for me lately” category. It was a top performer for a long time and earned our top $$$$ rating. But it started to slip in 2008, losing 26.3%, and has been a sub-par performer since with a fourth quartile finish in 2009 and below average results in 2010 and so far in 2011.
The portfolio is crammed with large-cap dividend-paying companies such as the Big Five banks, TransCanada Corp., Enbridge, and CN Rail. But it isn’t coming together for manager Michael Stanley the way it did in years past. The one-year gain to Aug. 31/11 was 7% but that was below the category average of 7.8%. The fund also shows below average returns for all time periods out to five years. t
As for cash flow, forget it. The fund started making quarterly distributions in 2006, but at one cent per unit we aren’t sure why they bother. There is a year-end capital gains distribution but it can vary considerably so if income is a priority, look elsewhere.
The bottom line is that this fund is fading and there are now better choices to be found. The rating is cut to $$.