Talk the talk

Dave Santry, head of investment business at Canada Life, talks to David Clerkin.

You run a fund made up of shares in companies that pay high dividends. Why would this appeal to investors?

The Canada Life Dividend Fund offers access to a portfolio of quality companies that pay above-average dividends. This makes it ideal for investors seeking an income, or capital growth. The fund declares a level of income based on the dividends received and distributes this in April and October each year. Investors can elect to have the dividend reinvested back into the fund if they wish.

The fund participates fully in the growth of the securities it holds and there is no cap on the potential for growth.

What companies are in the fund?

It invests in around 40 companies based in Ireland and abroad. Some examples include financial stocks like Citigroup, BNP Paribas and Irish Life & Permanent, as well as GlaxoSmithkline, Diageo and Royal Dutch Petroleum.

We choose companies that have not cut their dividend per share in any of the last five years. They must have earned enough to cover its latest dividend payment and be in strong financial health.

Would it be fair to describe this fund as a defensive investment?

The fund has a lower risk profile than a general equity fund and is safer than investing in the equity market as a whole.

What investors are you aiming to attract? Would it suit regular savers, pension schemes or lump sum investors?

The fund is available as an option across our pension, single premium investment and Approved Retirement Fund contracts.

What’s the minimum investment level? What timeframe should investors be thinking of before withdrawing their money?

The minimum investment is €10,000 and, as with any equity-based investment, investors should have a minimum time horizon of five years. Markets can be volatile on a calendar year basis.

But over longer time periods returns are smoothed out. The average return in equities over the past 75 years is 9% per annum, significantly outpacing fixed interest, tracker or guaranteed investments.

How has the fund performed? When was it set up?

It was set up in March 2003 and has more than €100 million under management. Performance over the past year is up nearly 17% and since March 2003 is up 55%. This makes it number one in its peer group.