Dividend investing isn't just about after-tax yields

Global diversification outweighs Canadian tax credits, Fidelity manager says.

Diana Cawfield 10 December, 2015 | 6:00PM
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Ramona Persaud, a portfolio manager with Fidelity Investments Canada in Toronto, looks beyond dividend yields for performance and income in her global mandates. "I believe that exceptional returns come from taking a value-oriented approach," she says. "Value investing tends to work over a very long period because it's all about starting out with low expectations, and then stock picking well enough to pick the companies that will beat those expectations."

Persaud runs about 85% of the equity portion of Fidelity Global Dividend, and about 40% of the equity portion of Fidelity Global Monthly Income. Her investment strategy is the same for both mandates.

Holding 100 to 120 names in Fidelity Global Dividend, Persaud notes that global investing offers much more diversification by industry sector, since the Canadian market is heavily concentrated in natural resources and financial services. Secondly, she adds, there are price inefficiencies to be exploited globally, "in the sense that you don't have a lot of eyeballs on your average global stocks."

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar Rating
General Electric Co104.05 USD0.87Rating
Olympus Corp22.10 USD3.32
Suncor Energy Inc22.86 USD1.24
Suncor Energy Inc28.25 CAD1.11

About Author

Diana Cawfield

Diana Cawfield  Diana Cawfield is an award-winning writer who has been a regular Morningstar contributor since 2000. Her numerous publication credits include the Toronto StarAdvisor's Edge and Chatelaine, as well as the Canadian Securities Institute's online educational services.

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