Vancouver-based Matrix Funds Management has launched Canada's first licensed Dow Jones Canada high dividend 50 index product.
Matrix Dow Jones Canada High Dividend 50 Fund (Corporate Class) is designed to closely match the returns and characteristics of the new Dow Jones Canada high dividend 50 index, combining high dividend paying companies with four fundamental based quality factors in a composite approach.
"We listened to advisors and saw a need in the high dividend equity income market," says David Levi, CEO. "This index could become the benchmark for high dividend equity income in Canada. The strategy has significant appeal with its focus on current and former income trusts and we are confident investors will agree."
Matrix says the fund combines the power of exchange-traded funds with the convenience and broad accessibility of mutual funds in a tax beneficial corporate class structure.
The fund has low cost, portfolio transparency and tax efficiency which are common attributes of popular ETFs.
"Based on our research, the fund will solve some trading related issues for securities licensed advisors and investment counsellors," explains Grahame Lyons, managing partner, Matrix Funds.
The product is also expected to meet demand from the larger body of mutual fund advisors and eligible insurance licensed advisors.
The corporate class share structure means investors with taxable accounts can defer capital gains taxes if they are switching into other Matrix corporate class funds.
"Our research indicates there are $44.7 billion in assets in 350+ corporate class funds, almost all using traditional active management. We see an opportunity to provide investors choice with this prominent index provider's strategy," says Lyons.
The new fund is what Matrix Funds considers a "smart indexing" solution. "Combining traditional indexing with fundamental factors that active fund managers consider to measure yield quality is well suited for this monthly income product," says Lyons.
Matrix Funds Management, a division of Growth Works Capital Ltd., is the manager of the Matrix Funds and a subsidiary of Matrix Asset Management Inc. (TSX:MTA).