Alt Thinking April 30, 2024
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Canadian Large Cap Leaders Split Corp.

Canadian Large Cap Leaders Split Corp. - Apr 2024
Investment Team
  • John Wilson, MBA
    Co-CEO, Managing Partner, Senior Portfolio Manager
    John Wilson, MBA
    Co-CEO, Managing Partner, Senior Portfolio Manager
    John Wilson is a founding principal, Co-CEO and Managing Partner of Ninepoint Partners. John oversees all aspects of the firm’s investment and research initiatives. Prior to Ninepoint’s formation, he was CEO, CO-CIO and Senior Portfolio Manager at Sprott Asset Management (SAM). Previous to SAM, he was Chief Investment Officer at Cumberland Private Wealth Management, founder and CEO of DDX Capital Partners, an alternative investment management firm; was Managing Director at RBC Capital Markets...
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  • Jeff Sayer, MBA, CFA
    Vice President, Portfolio Manager
    Jeff Sayer, MBA, CFA
    Vice President, Portfolio Manager
    Jeff Sayer is Vice President, Portfolio Manager at Ninepoint Partners. Jeff oversees Global Equity, Infrastructure, Tactical Balanced and Split Corp investment strategies for the firm. Prior to Ninepoint’s formation, Jeff was with Sprott Asset Management (SAM), rounding out more than 20 years of investment management experience. Jeff received his MBA from the Schulich School of Business at York University and was awarded his CFA designation in 2004.
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  • Colin Watson
    Vice President, Portfolio Manager
    Colin Watson
    Vice President, Portfolio Manager
    Colin Watson's background spans across equities, asset allocation & derivative-based strategies. Prior to Ninepoint Partners, Colin worked as a Portfolio Manager at IMCO on a team responsible for overseeing IMCO’s $26B public equity allocation and deploying derivatives-based strategies for IMCO’s public asset allocation strategy. Prior to IMCO, Colin worked at Ninepoint Partners on equity selection & options-based overlays. Colin holds a Bachelor of Commerce Degree from McMaster Unive...
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Key Takeaways
  • Canadian Large Cap Leaders Split Corp has been active for two months, fully invested in ten high-quality Canadian Dividend Growth Companies.
  • Timing of the Corp's launch is seen as opportune with expected upcoming interest rate cuts in Canada and the United States, anticipated to benefit dividend-paying stocks and support P/E multiple expansion.
  • Six holdings have paid dividends, generating cash inflows for the Corp: Canadian Natural, Manulife, Sun Life, Suncor, TELUS, and TD Bank.

The Canadian Large Cap Leaders Split Corp has now been active for two complete months. We are fully invested in ten approximately equally-weighted, high-quality Canadian Dividend Growth Companies. From a macro perspective, we think that the timing for the launch of the Corp was opportune, and we are confident that the first interest rate cuts of the cycle are approaching, both in Canada and the United States. Lower interest rates should provide a nice tailwind for our dividend paying stocks and should allow P/E multiples to continue to expand.

Our top performing stocks in April were Suncor, TELUS and Canadian Natural, while Bank of Montreal, Manulife and Sun Life detracted from performance. Importantly, six of our holdings have now paid dividends, Canadian Natural, Manulife, Sun Life, Suncor, TELUS and TD Bank, which generated cash inflows for the Corp. As we’ve discussed previously, MFC increased its dividend by 10%, driven by improved insurance underwriting, the net impact of rising interest rates, and business growth, which translated into double-digit growth in core EPS. CNQ also raised its dividend by 5%, on the back of strong operating results and reasonably solid commodity prices. The rest of our holdings are expected to declare and pay dividends shortly, and we expect that at least a few of them will be able to boost their dividends based on our analysis and outlook.

Finally, we are pleased to report that the Canadian Large Cap Leaders Split Corp has announced its second distribution, payable on May 14, 2024, to the Class A Shareholders of record at the close of business on April 30, 2024. As planned, holders of the Class A Shares will receive the $0.12500 per share regular monthly dividend. 

Again, we appreciate the support of all those who invested in the Canadian Large Cap Leaders Split Corp.

Until next month,

John, Jeff & Colin
Ninepoint Partners

Historical Commentary

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  • Commentary
    December 2024
    Canadian Large Cap Leaders Split Corp.
    It was another excellent year for equities (and most other asset classes), with the S&P 500 posting a +23.3% return (+25.0% on a total return basis), making it two years of +20% returns in a row. For Canadian domestic investors, the TSX posted a +18.0% return (+21.7% on a total return basis), which was a relatively decent performance. Broadly speaking, US stocks outperformed Canadian stocks, large caps outperformed small caps and growth outperformed value, consistent with the trends of the past several years.
    Equities
  • Commentary
    November 2024
    Canadian Large Cap Leaders Split Corp.
    As we approach the holiday season and the end of 2024, investors should be pleased with their returns for the year. Further, although we are already part way through December, we are entering what has historically been a seasonally strong period for the equity markets, especially after excellent year-to-date performance. We think that the themes and trends that have been working are likely to persist through the balance of the year and into early 2025, as investors chase performance while refraining from selling winners to avoid realizing taxable capital gains.
    Equities
  • Commentary
    October 2024
    Canadian Large Cap Leaders Split Corp.
    As we write this October commentary, it is amazing how much has happened during the month and into the first week of November.
    Equities
  • Commentary
    September 2024
    Canadian Large Cap Leaders Split Corp.
    The US Federal Reserve has now begun easing monetary policy. After 525 bps of tightening from March 2022 to July 2023, the FOMC has finally lowered interest rates by 50 bps to 5.00% on September 18.
    Equities
  • Commentary
    August 2024
    Canadian Large Cap Leaders Split Corp.
    In August, the S&P 500 returned 2.3% and 2.4% on a total return basis while the TSX Composite returned 1.0% and 1.2% on a total return basis.
    Equities
  • Commentary
    July 2024
    Canadian Large Cap Leaders Split Corp.
    In the stock market, things can happen slowly then suddenly all at once. Historically, 5% drawdowns happen about three times a year while 10% drawdowns happen about once a year and we’ve just experienced the latter.
    Equities
  • Commentary
    June 2024
    Canadian Large Cap Leaders Split Corp.
    The Canadian Large Cap Leaders Split Corp has now been active for three complete months. We have been through a quarterly dividend cycle and cash flow from each of our holdings has flowed into the Corp. Importantly, we’ve had several of our companies boost dividend payments, including Bank of Montreal, Canadian Natural Resources, Manulife and TELUS, supported by generally solid results.
    Equities
  • Commentary
    May 2024
    Canadian Large Cap Leaders Split Corp.
    The Canadian Large Cap Leaders Split Corp has now been active for three complete months. We have been through a quarterly dividend cycle and cash flow from each of our holdings has flowed into the Corp. Importantly, we’ve had several of our companies boost dividend payments, including Bank of Montreal, Canadian Natural Resources, Manulife and TELUS, supported by generally solid results.
    Equities
View All
All Funds
  • NPS
    (Class A)
    Tax-Efficient Funds Split Share Corps. Equity
    $15.91 $0.15 (0.97%)
    As at 1/30/2025
    Go To Fund

    Ninepoint Partners LP is the investment manager to Canadian Large Cap Leaders Split Corp. (the “Company”). Important information about the Company, including its investment objectives and strategies, purchase options, and applicable management fees, performance fees (if any), and expenses, is contained in its prospectus. There is no assurance of a return on a subscriber’s initial investment. Please read the prospectus carefully before investing. This communication does not constitute an offer to sell or solicitation to purchase securities of the Company.

    The Canadian Large Cap Leaders Split Corp. is generally exposed to the following risks. See the prospectus of the Company for a description of these risks: No Assurances on Achieving Objectives, Concentration Risk, Risk Related to Passive Investments, Performance of the Portfolio Issuers and Other Considerations, Greater Volatility of the Class A Shares, Equity Risk, COVID-19, Market Volatility, Market Disruptions, Recent and Future Global Financial Developments, Sensitivity to Interest Rates, Changes in Credit Rating, Reliance on the Manager and the Portfolio Manager, Conflicts of Interest, Use of Options and Other Derivative Instruments, Securities Lending, Sensitivity to Volatility Levels, Taxation, Significant Retractions, Loss of Investment, non-concurrent Retraction, Changes in Legislation and Regulatory Risk, Lack of Operating History, Cybersecurity Risk.

    The information contained herein does not constitute an offer or solicitation by anyone in the United States or in any other jurisdiction in which such an offer or solicitation is not authorized or to any person to whom it is unlawful to make such an offer or solicitation. Prospective investors who are not resident in Canada should contact their financial advisor to determine whether securities of the Company may be lawfully sold in their jurisdiction.

    Ninepoint Partners LP: Toll Free: 1.866.299.9906. Dealer Services: CIBC Mellon GSSC Record Keeping Services: Toll Free: 1.877.358.0540

The Canadian Large Cap Leaders Split Corp. is generally exposed to the following risks. See the prospectus of the Company for a description of these risks: No Assurances on Achieving Objectives, Concentration Risk, Risk Related to Passive Investments, Performance of the Portfolio Issuers and Other Considerations, Greater Volatility of the Class A Shares, Equity Risk, COVID-19, Market Volatility, Market Disruptions, Recent and Future Global Financial Developments, Sensitivity to Interest Rates, Changes in Credit Rating, Reliance on the Manager and the Portfolio Manager, Conflicts of Interest, Use of Options and Other Derivative Instruments, Securities Lending, Sensitivity to Volatility Levels, Taxation, Significant Retractions, Loss of Investment, non-concurrent Retraction, Changes in Legislation and Regulatory Risk, Lack of Operating History, Cybersecurity Risk.

Ninepoint Partners LP is the investment manager to Canadian Large Cap Leaders Split Corp. (the “Company”). Important information about the Company, including its investment objectives and strategies, purchase options, and applicable management fees, performance fees (if any), and expenses, is contained in its prospectus. There is no assurance of a return on a subscriber’s initial investment. Please read the prospectus carefully before investing. This communication does not constitute an offer to sell or solicitation to purchase securities of the Company.

The information contained herein does not constitute an offer or solicitation by anyone in the United States or in any other jurisdiction in which such an offer or solicitation is not authorized or to any person to whom it is unlawful to make such an offer or solicitation. Prospective investors who are not resident in Canada should contact their financial advisor to determine whether securities of the Company may be lawfully sold in their jurisdiction.

The opinions, estimates and projections (“information”) contained within this report are solely those of Ninepoint Partners LP and are subject to change without notice. Ninepoint Partners makes every effort to ensure that the information has been derived from sources believed to be reliable and accurate. However, Ninepoint Partners assumes no responsibility for any losses or damages, whether direct or indirect, which arise out of the use of this information. Ninepoint Partners is not under any obligation to update or keep current the information contained herein. The information should not be regarded by recipients as a substitute for the exercise of their own judgment. Please contact your own personal advisor on your particular circumstances.

Views expressed regarding a particular company, security, industry or market sector should not be considered an indication of trading intent of any investment funds managed by Ninepoint Partners LP. Any reference to a particular company is for illustrative purposes only and should not to be considered as investment advice or a recommendation to buy or sell nor should it be considered as an indication of how the portfolio of any investment fund managed by Ninepoint Partners LP is or will be invested.

Ninepoint Partners LP and/ or its affiliates may collectively beneficially own/control 1% or more of any class of the equity securities of the issuers mentioned in this report. Ninepoint Partners LP and/or its affiliates may hold short position in any class of the equity securities of the issuers mentioned in this report. During the preceding 12 months, Ninepoint Partners LP and/or its affiliates may have received remuneration other than normal course investment advisory or trade execution services from the issuers mentioned in this report.