Tetrem's Daniel Bubis cautions against chasing yield

Value manager favours financial services over defensive dividend-payers.

Sonita Horvitch 26 February, 2014 | 7:00PM

 Daniel Bubis, president and CEO at Winnipeg-based Tetrem Capital Management Ltd., says that defensive dividend-paying stocks remain expensive, while offering lacklustre earnings growth, against the backdrop of a strengthening global economy.

In this defensive-dividend category, he includes pipelines, utilities, telecommunications services and consumer staples. Investors have been chasing these stocks for their dividend yields, as well as for their safe-haven characteristics, says Bubis, who is a value manager.

Rising interest rates represent a headwind for these "bond proxies." These companies have "little economic sensitivity or exposure outside of Canada."

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Sonita Horvitch

Sonita Horvitch  

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