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Ninepoint Focused Global Dividend Fund

Ninepoint Focused Global Dividend Fund - February 2025
Key Takeaways
  • The Ninepoint Focused Global Dividend Fund returned 0.97% YTD, while the S&P Global 1200 Index returned 3.17%; for February, the Fund returned -3.02%, and the Index returned -0.82%.
  • Market volatility increased due to economic uncertainties, trade war fears, weaker-than-expected corporate earnings, and policy disruptions under the Trump administration, leading to a selloff starting February 20th. Key sectors impacted included consumer discretionary, defense, healthcare, and AI-focused data centers.
  • We are currently overweight the Financials, Industrials and Consumer Staples sectors, while underweight the Information Technology, Energy and Materials sectors.

Monthly Update

Year-to-date to February 28, the Ninepoint Focused Global Dividend Fund generated a total return of 0.97% compared to the S&P Global 1200 Index, which generated a total return of 3.17%. For the month, the Fund generated a total return of -3.02% while the Index generated a total return of -0.82%.

Ninepoint Focused Global Dividend Fund - Compounded Returns¹ As of February 28, 2025 (Series F NPP964) | Inception Date: November 25, 2015

1M

YTD

3M

6M

1YR

3YR

5YR

Inception

Fund

-3.02%

0.97%

1.24%

12.31%

22.64%

14.20%

13.26%

9.81%

S&P Global 1200 TR (CAD)

-0.82%

3.17%

3.49%

11.69%

23.48%

15.44%

15.81%

12.47%

The euphoria after President Trump’s victory and hopes of “animal spirits” powering the North American markets to new highs based on a combination of lower taxes, deregulation and America-first policies have quickly faded. Early signs of a developing economic soft patch were exacerbated by the administration’s instigation of a global trade war premised on irrational arguments and questionable legality. Unfortunately, Trump’s strategy seems to rely on disruption and destabilization to meet his administration’s goals, which themselves are inherently conflicting and economically unsound. We’ve tried to put together a timeline for the selloff, that started on Thursday, February 20th and, as of writing, may not have completely stabilized.

On that Thursday, the consumer discretionary bellwether, Walmart, reported earnings pre-market with revenue coming in at $180.6 billion versus $180.0 billion expected (up 4.1% or 5.3% in constant currency, with US same store sales up 4.6%, the number of transactions up 2.8% and the average ticket up 1.8%). Although EPS was better than expected at $0.66 versus $0.64 (up 10%), guidance was weaker than expected. Management stated that FY 2026 constant currency net sales growth would come in at 3% to 4% versus 4% expected and that FY 2026 EPS would come in at $2.50 to $2.60 versus $2.76 expected. When the market opened that morning, WMT stock declined by high single digits, other consumer discretionary stocks fell in sympathy and many US bank stocks dropped by mid-single digits on the weaker outlook for the US consumer.1

Trump’s strategy seems to rely on disruption and destabilization to meet his administration’s goals, which themselves are inherently conflicting and economically unsound.

During market hours on Thursday, reports regarding US defense spending cuts began to circulate, with the Pentagon proposing 8% cuts to its budget in each over the next five years for $50 billion in annual savings. Defense stocks declined in a sharp knee-jerk reaction, including the retail-trader favourite Palantir (the CEO filing to sell over $1 billion worth of stock also likely didn’t help sentiment). More market moving news hit the tape later in the afternoon when a FERC (Federal Energy Regulatory Commission) open meeting led to the initiation of a new proceeding to review power co-location regulations. The proceeding allowed for 30 days for comments and a subsequent 30 days for reply comments, with the objective of finding a “just solution” while providing clarity as quickly as possible. However, the lack of an immediate decision was viewed as a negative data point for the incumbent independent power producers (IPPs) and raised the possibility that data centre developers would increasingly prefer to work with the regulated utilities. Consequently, stocks tied to the AI-focused data centre trade began to decline precipitously, which included the IPPs, various industrials and natural gas producers and pipelines.

On Friday before the market opened, news reports surfaced that the Department of Justice had launched an inquiry into UnitedHealth Group’s Medicare billing practices. We can’t comment on the potential outcome of the investigation, but UNH stock (a large component of the Dow Jones Industrial Average) declined by high single digits throughout the day. Next, flash PMI readings were released mid-morning for February, with the flash services PMI declining to 49.7 (a 25-month low) from 52.9, further calling into question the health of the US consumer. Finally, during the afternoon session, news reports called attention to an article in a scientific journal, written by a prominent researcher at the Wuhan Institute of Virology, identifying a new, potentially dangerous Covid strain. Unnerved investors were unwilling to hold stocks over the weekend and markets slid into the close.

Before the market opened on Monday, a sell-side report was published that claimed Microsoft had cancelled leases of about 200 MW of data centre capacity with two private data centre developers.2 Subsequent channel checks and an interview with Satya Nadella clarified that there had been no change to MSFT’s data centre strategy, that the Company still planned to spend $80 billion this year and had simply reallocated dollars based on a 10-year view of demand for cloud and AI computing. Importantly, 200 MW is only a small component of MSFT’s data centre's current capacity (approximately 5 GW), and the shift was likely driven by the lack of signed power agreements as opposed to weakening demand. MSFT also seemed to be shifting from long-cycle AI spending (building the data centres) to shorter-cycle spending (adding server racks, power and cooling to the facilities). But once again, MSFT stock and various other stocks tied to the AI-focused data centre trade continued to trade lower.

The next two days were relatively quiet, as investors waited for the main event of the week, Nvidia’s operating and financial results.  But in the meantime, economic data showed that US consumer confidence declined 7% to a reading of 98.3, at least in part due to Trump suggesting that tariffs were going to be applied to imports from Canada and Mexico at 25% and 10% on energy on March 4th as planned. Investor excitement ramped up again on Wednesday night when, after much anticipation, Nvidia reported financial results that were exceptional but just not quite good enough relative to expectations.3 Revenue was $39.3 billion versus $38.0 billion expected (up 78% year-over-year) and EPS was $0.89 versus $0.84 (up 71% year-over-year). However, forward guidance was not the same blowout that investors had gotten used to, with management seeing Q1 2026 revenue of $43.0 billion (plus or minus 2%) versus $42.0 billion expected and gross margins declining from 73.0% in Q4 to 71.0% in Q1 (plus or minus 50 bps) due to the Blackwell ramp. After fluctuating up and down overnight and pre-market, shares of NVDA fell by high single digits during market hours on Thursday.

The key takeaway from the market reactions to this extensive list of both macroeconomic and company specific news is that uncertainty and volatility will be much higher over the next four years than over the past four years. The threat of tariffs applied to goods imported from Canada, Mexico and China to the United States will likely act as an overhang on investor sentiment, with potentially on-again/off-again announcements adding to the confusion for some time to come.

But it is important to remember that the long-term drivers of stock prices remain robust, with 2025 revenue expected to grow 5.5% and EPS expected to grow 12.1% (to roughly $271 for the S&P 500) and 2026 revenue expected to grow 6.5% and EPS expected to grow 14.0% (to roughly $309 for the S&P 500), according to FactSet. We would also point out that the interest rate forward curve is currently pricing in at least three cuts in 2025, likely occurring at the June, September and December FOMC meetings, which should offer some downside support if the outlook deteriorates. In this environment, we don’t want to panic, but we have reduced outsized allocations to individual stocks and investment themes while remaining invested in a diversified portfolio of dividend-paying, high-quality companies.

Top contributors to the year-to-date performance of the Ninepoint Focused Global Dividend Fund by sector included Financials (+106 bps), Health Care (+89 bps) and Consumer Staples (+88 bps), while the Information Technology (-207 bps), Industrials (-51 bps) and Utilities (-30 bps) sectors detracted from performance on an absolute basis.

On a relative basis, positive return contributions from the Consumer Staples (+47 bps), Communication (+44 bps) and Health Care (+8 bps) sectors were offset by negative contributions from the Information Technology (-126 bps), Industrials (-97 bps) and Utilities (-42 bps) sectors.

Total Return Contribution - YTD
Source: Ninepoint Partners

We are currently overweight the Financials, Industrials and Consumer Staples sectors, while underweight the Information Technology, Energy and Materials sectors. We are only about a month into President Trump’s second term, but policy announcements from his administration have already led to greater volatility in the equity, fixed income and currency markets. Although we are optimistic about 2025, the ongoing threat of a global trade war and chaos from the administration will keep the market on edge. To mitigate the swings, we remain focused on high quality, dividend payers that have demonstrated the ability to consistently generate revenue and earnings growth through the business cycle.

Sector Exposure
Source: Ninepoint Partners

The Ninepoint Focused Global Dividend Fund was concentrated in 29 positions as at February 28, 2025 with the top 10 holdings accounting for approximately 37.1% of the fund.  Over the prior fiscal year, 19 out of our 29 holdings have announced a dividend increase, with an average hike of 33.2% (median hike of 6.3%). We will continue to apply a disciplined investment process, balancing various quality and valuation metrics, in an effort to generate solid risk-adjusted returns.

Jeffery Sayer, CFA
Ninepoint Partners

 

 

 

References:

1.Walmart Earnings Release (FY25 Q4)

2. TD Cowen- Communications Infrastructure: Data Centers Report. February 21, 2025

3.NVIDIA Announces Financial Results

Historical Commentary

View All
  • Focused Global Dividend Fund
    Year-to-date to January 31, the Ninepoint Focused Global Dividend Fund generated a total return of 4.11% compared to the S&P Global 1200 Index, which generated a total return of 4.02%.
    Sector Investments
  • Focused Global Dividend Fund
    Year-to-date to December 31, the Ninepoint Focused Global Dividend Fund generated a total return of 31.73% compared to the S&P Global 1200 Index, which generated a total return of 29.76%. For the month, the Fund generated a total return of 0.27% while the Index generated a total return of 0.31%.
    Sector Investments
  • Focused Global Dividend Fund
    Year-to-date to November 30, the Ninepoint Focused Global Dividend Fund generated a total return of 31.37% compared to the S&P Global 1200 Index, which generated a total return of 29.36%. For the month, the Fund generated a total return of 7.19% while the Index generated a total return of 4.30%.
    Sector Investments
  • Ninepoint Focused Global Dividend Fund
    Year-to-date to October 31, the Ninepoint Focused Global Dividend Fund generated a total return of 22.56% compared to the S&P Global 1200 Index, which generated a total return of 24.03%. For the month, the Fund generated a total return of 2.54% while the Index generated a total return of 1.19%.
    Sector Investments
  • Ninepoint Focused Global Dividend Fund
    Year-to-date to September 30, the Ninepoint Focused Global Dividend Fund generated a total return of 19.52% compared to the S&P Global 1200 Index, which generated a total return of 22.57%. For the month, the Fund generated a total return of 0.92% while the Index generated a total return of 2.27%.
    Sector Investments
  • Ninepoint Focused Global Dividend Fund
    Year-to-date to August 31, the Ninepoint Focused Global Dividend Fund generated a total return of 18.43% compared to the S&P Global 1200 Index, which generated a total return of 19.86%. For the month, the Fund generated a total return of 0.23% while the Index generated a total return of 0.01%.
    Sector Investments
  • Ninepoint Focused Global Dividend Fund
    Year-to-date to July 31, the Ninepoint Focused Global Dividend Fund generated a total return of 18.16% compared to the S&P Global 1200 Index, which generated a total return of 19.84%. For the month, the Fund generated a total return of 2.02% while the Index generated a total return of 2.66%.
    Sector Investments
  • Ninepoint Focused Global Dividend Fund
    Year-to-date to June 30, the Ninepoint Focused Global Dividend Fund generated a total return of 15.82% compared to the S&P Global 1200 Index, which generated a total return of 16.74%. For the month, the Fund generated a total return of 4.05% while the Index generated a total return of 2.63%.
    Sector Investments
  • Focused Global Dividend Fund
    Year-to-date to May 31, the Ninepoint Focused Global Dividend Fund generated a total return of 11.31% compared to the S&P Global 1200 Index, which generated a total return of 13.75%. For the month, the Fund generated a total return of 2.81% while the Index generated a total return of 3.76%.
    Sector Investments
  • Focused Global Dividend Fund
    Year-to-date to April 30, the Ninepoint Focused Global Dividend Fund generated a total return of 8.26% compared to the S&P Global 1200 Index, which generated a total return of 9.62%. For the month, the Fund generated a total return of -1.28% while the Index generated a total return of -2.07%.
    Sector Investments
  • Ninepoint Focused Global Dividend Fund
    Year-to-date to March 31, the Ninepoint Focused Global Dividend Fund generated a total return of 9.67% compared to the S&P Global 1200 Index, which generated a total return of 11.94%. For the month, the Fund generated a total return of 1.13% while the Index generated a total return of 3.25%.
    Sector Investments
  • Focused Global Dividend Fund
    Year-to-date to January 31, the Ninepoint Focused Global Dividend Fund generated a total return of 2.87% compared to the S&P Global 1200 Index, which generated a total return of 2.26%. The year 2024 has started off much like 2023 ended, with stocks in the Communication and Information Technology sectors continuing to rally. However, after peaking last October and falling through the end of the year, the US 10-year Treasury bond yield retraced some of its recent move lower this past month.
    Sector Investments

All returns and fund details are a) based on Series F shares; b) net of fees; c) annualized if period is greater than one year; d) as at 2/28/2025; e) 2015 annual returns are from 11/25/15 to 12/31/15. The index is S&P GLOBAL 1200 TR (CAD) and is computed by Ninepoint Partners LP based on publicly available index information.

The Fund is generally exposed to the following risks: ADR risk; Capital depletion risk; Concentration risk; Credit risk; Currency risk; Cybersecurity risk; Derivatives risk; Exchange traded funds risk; Foreign investment risk; Inflation risk; Interest rate risk; Liquidity risk; Market risk; Rule 144A and other exempted securities risk; Securities lending, repurchase and reverse repurchase transactions risk; Series risk; Short selling risk; Specific issuer risk; Tax risk.

Ninepoint Partners LP is the investment manager to the Ninepoint Funds (collectively, the “Funds”). Commissions, trailing commissions, management fees, performance fees (if any), and other expenses all may be associated with investing in the Funds. Please read the prospectus carefully before investing. The indicated rate of return for series F shares of the Fund for the period ended 2/28/2025 is based on the historical annual compounded total return including changes in share value and reinvestment of all distributions and does not take into account sales, redemption, distribution or optional charges or income taxes payable by any unitholder that would have reduced returns. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated. 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 Fund 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.