Despite challenges, Heward sees opportunities for investors in Canadian equities in the new year
MONTREAL, Dec. 15, 2015 /CNW Telbec/ – Heward Investment Management Inc. (“Heward”), a Montreal-based portfolio management firm, today announced its 2016 outlook on dividend investing in Canada.
There are several major challenges facing the Canadian economy, including: the contraction of the energy sector, concerns over a housing bubble and the unemployment rate.
However, despite these challenges, Heward sees room for optimism. Specifically in sectors including: consumer goods and services, telecommunications, technology and growth utilities. Other positive variables include: the stability of the Canadian banking system, large government infrastructure project investments, a comparatively strong US economy and a weaker Canadian dollar, which favors exports.
It is also important to note that volatility provides opportunities for investors. Using a proactive and nimble investment strategy, profits may be drawn from short-term price fluctuations. This trend underscores the limitations of the S&P/TSX Total Return Index (the “Index”) because 66.7% of its listings are in energy or financial services – sectors where short-term profit opportunities have been rare of late.
The Heward Canadian Dividend Growth Fund (the “Fund”) invests in Canadian equities with a history of consistently growing dividends. The criteria for selection include: straight-forward business models, the provision of need-based products and services, long term earnings, visibility and predictability, and proven management teams that successfully increase cash flows and operate with low levels of leverage.
“Looking at the performance of the Fund, we see quite strong returns in both up and down markets, and we are drawing general conclusions on that basis,” says Renato Anzovino CFA, Vice-President and Portfolio Manager, Heward. “We believe that focusing on Canadian companies with strong management teams will continue to offer growth opportunities for investors. Some specific examples include: Saputo Inc., Rogers Wireless, Open Text Corporation and Algonquin Power & Utilities Corporation.”
“The Fund has offered superior performance and lower overall long term volatility than the Index: growth of 9.57% for the Fund, versus 3.77% for the Index (for the five-year period ending November 30, 2015). The ‘beta’ is a standardized calculation of systematic risk, based on fluctuation of returns relative to the overall market. The Fund’s beta was 0.58, whereas the Index’s beta was 1.00 (also for five-year period ending November 30, 2015),” concludes Mr. Anzovino.
About Heward Investment Management Inc.
Heward has been providing client-focused portfolio management services since 1981. The firm’s independence and disciplined investment management approach have made Heward a trusted partner by providing clients with value-added performance. For more information, please visit www.heward.com.
