Canoe Income Fund (EIT.UN.TO) is a Canadian closed-end investment trust that looks like the perfect income product for retirees. Yet, the fund is so complex that we needed a full episode to demystify it. Here’s all you must know about this 9% yielder!
Here’s the complete Canoe Income Fund analysis
- Canoe is one of the largest closed-end investment funds in Canada. It has a fixed number of shares and has been created to take your money, manage it, and distribute juicy monthly dividends to help you manage your retirement budget.
- Monthly dividends seem interesting, but what does its sector allocation look like? Is it diversified enough to keep your distributions safe?
- Which companies are among its top 10 holdings? Mike would certainly select Royal Bank (RY.TO) and Canadian Natural Resources (CNQ.TO) just to name two. Surprisingly, the Canadian fund also includes US stocks. Does that make sense?
- Some companies raised Mike’s eyebrows: energy stocks, gold companies and one of the worst telcos… really?
- The fund also includes some companies that don’t pay dividends. What is their role in it then?
- Despite some doubts, Canoe’s performance is great! It has beaten its benchmark (the TSX) every year since its inception! But is the benchmark right? Mike explains why Canoe is not completely transparent and what the performance should really look like.
- While Canoe’s yield is very generous, is its dividend growing? What kind of concerns does the dividend growth bring?
- In the end, retirees should buy EIT.UN.TO or not? Are there any better choices?
This safe list includes a positive dividend triangle, PRO rating and Dividend Safety scores, payout and PE ratios, dividend yield, the chowder rule, and more!
Here is the table Mike used to describe Canoe Income Fund holdings.
The Dividend Triangle is a concept that Mike invented to describe the foundation of his investment strategy. It consists of three metrics: revenue growth, earnings growth and dividend growth. Here is a complete episode on it!
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