Opportunity
Dividend-paying small and mid capitalization companies offer income plus better growth prospects than large capitalization companies. Investors obtain the benefits of a monthly $0.06/unit tax-efficient eligible dividend distribution while retaining upside participation in the equity markets.
Strategy
The fund invests primarily in dividend-paying equities with a modest weight in high yield bonds as a diversifying complement. For the fund's equities, we select holdings that generate long-term earnings and deliver cash flow growth, while offering high returns on equity. In addition, companies in the portfolio exhibit high quality management teams, clean balance sheets, and strengthening competitive positions in their industries.
We seek out companies with growth potential that also happen to have a high dividend yield, rather than companies that pay a high yield, but enjoy limited growth prospects. By targeting equities that pay out a low percentage of their earnings, we improve the likelihood of distribution increases and reduce the risk of potential distribution cuts in tough times. A value overlay ensures that we do not overpay for yield.
The Norrep advantage
Niche expertise: With over a decade of proven outperformance in small/mid cap equity investing, our portfolio managers excel at identifying undervalued securities with significant growth potential before the market recognizes their value.
Focused and independent insight: Our investment management group has a deep roster of experienced professionals that allows the portfolio managers to objectively view an investment's merits in making informed decisions. We choose to know a lot about niches like small/mid cap income equities, rather than a little about everything.
Proven and repeatable methodology: Our portfolio management team ensures that we build portfolios which are more attractive than the market based on key value and momentum metrics that have been proven historically to result in favourable investment outcomes.
Long-term focus: We focus on each investment's long-term prospects and not necessarily the next quarter's earnings. Short-term market turbulence is often viewed as an opportunity to profit from inefficient markets by selectively adding to fund positions in our favourite investments.