seekers, dividend investors, and retirees are always looking for cheap ways to
generate diversified income. In today’s low interest rate world this is
becoming increasingly difficult. Here is a summary, performance review, and
analysis of one option available to investors: The Tangerine Dividend
The Tangerine Dividend Portfolio is 99.7% invested in Canadian, American, and International Equities as of August 31, 2019. Canada makes up 50.8% of the allocation while America accounts for 24.5% and International accounts for 24.4%.
The fund is
well diversified with over 250 investments and no single stock accounting for
more than 5% of the portfolio. As of mid-2019, its biggest holdings were Inter Pipeline,
Energy, and BCE.
As of early 2020, the fund’s turnover
was calculated at 23%.
As of August
2019, the annual compounded return was 6.4%. According to Morningstar
the trailing-twelve-month yield is currently 2.90%. Morningstar also provides
good (and up to date) data on how the fund has performed since inception, on an
annual basis, and versus benchmarks. Here is a table:
The fund had
an excellent 2019 with a near 20% return, but lost 6.64% in 2018. Over time,
the fund has roughly matched the index which is a good sign. This means the
fund is doing what it is intended to do.
For a mutual
fund, the fees are fairly low. The Management Expense Ratio (MER) is 1.07% and
the Trading Expense Ratio is (TER) is 0.03% for a total Fund Expense of 1.10%. Investors
may generate other fees if the fund is switched or sold. According to Tangerine
these fees are $125.00. While these fees
are not as low as some ETFs out there, they appear low
versus industry averages. This low fee structure should not come as a
surprise to those who bank with Tangerine or use other Tangerine products. The
bank – fortunately given it was acquired by Scotia
– remains true to its low-cost roots.
Tangerine Dividend Fund was launched in late 2016 so one knock against it is
that it hasn’t been around that long. Fortunately, the indexes it tracks have
been around much longer.
Tangerine Investment Management Inc. has related the fund’s volatility and risk as medium. The prospectus lists many risks including equity / market risk, exchange traded fund risk, foreign investment risk, and more. Plus, the prospectus includes the typical spiel around how past returns are not indicative of future performance. This is pretty standard language for a fund sold in Canada.
and dividends are paid out to investors annually in December of each year. While
many funds pay out annually, this may be a problem for some investors who are
used to investing in companies or securities that pay out each quarter or even
each month. According to the prospectus:
“All distributions on units held in
Registered Plans will be automatically reinvested in additional units of this
Fund. All distributions on units held outside a Registered Plan will also be
automatically reinvested in additional units of this Fund, unless you tell your
dealer you want to receive them in cash.”
wishing to receive cash instead of buying more units may want to keep this in
mind when buying into this fund.
minimum investment thresholds, the fund doesn’t have a minimum. This is a nice
feature for those who want to test the water and buy a little before committing
more money. The lack of a minimum investment also makes it accessible to small
investors or investors who are just starting out and don’t have much to invest.
low interest rate world, many dividend investors, yield seekers, and retirees
are looking for cheap ways to generate diversified income. The Tangerine
Dividend Portfolio is relatively cheap, diversified, and provides a decent
yield which is paid out annually. Since its inception in late 2016, it has
generated respectable returns which have roughly matched its benchmarks. The
prospectus provided by Tangerine clearly spells out the risks associated with
the fund and gives a decent overview of how the fund works.
This is not an endorsement and is intended for informational purposes only. Smart Dividend Stocks has not invested in this fund. I have not invested personally in this fund. I do, however, bank with Tangerine. If you’re interested in opening a Tangerine account use my Orange Key: 39766591S1, deposit a minimum balance of $250, and receive a $50 bonus.Sign up here.