Top Canada Manager Adds U.S. Industrials in Manulife Stock Fund

(Bloomberg) -- Canada’s top-performing fund manager scooped up stocks on both sides of the border when markets slumped in early February, cutting his cash holdings in half.

The C$3.39 billion ($2.6 billion) Manulife Dividend Income Fund picked up industrials such as Roper Technologies Inc. and Ametek Inc. and added to positions in stocks like Thermo Fisher Inc., reducing its cash position to about 10 percent, said fund manager Conrad Dabiet.

“When the volatility hit in February, we were buying quite aggressively,” Dabiet said at a panel discussion at Bloomberg’s Toronto office on Wednesday. “We’d built the cash up to about 20 percent and the markets in February really served up a nice opportunity for us to deploy a lot of that cash.”

The Manulife Dividend Income Fund has a three-year cumulative return of 33 percent, making it the top-performing fund with assets of more than C$500 million with at least 75 percent invested in Canada. Its top stock holdings include Waste Connections Inc., Pembina Pipeline Corp., Open Text Corp., Brookfield Asset Management Inc. and Bank of Nova Scotia.

Dabiet increased the fund’s U.S. holdings to 20 percent from 15 percent and also slightly increased its Canadian holdings. He said he’s looking for companies with high levels of recurring revenue, growing margins and the ability to redeploy cash flow organically or through acquisitions.

--With assistance from Shin Pei and Kyle Hart

To contact the reporters on this story: Kristine Owram in Toronto at kowram@bloomberg.net, Matthew Winkler in New York at mwinkler@bloomberg.net.

To contact the editors responsible for this story: Arie Shapira at ashapira3@bloomberg.net, David Scanlan at dscanlan@bloomberg.net, Jacqueline Thorpe

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