Franklin Bissett Canadian High Dividend Fund AN INCOME STREAM PLUS CAPITAL GROWTH

Transcription

1 Franklin Bissett Canadian High Dividend Fund AN INCOME STREAM PLUS CAPITAL GROWTH

2 Franklin Templeton Investments Gain From Our Perspective At Franklin Templeton Investments, we re dedicated to one goal: delivering exceptional asset management for our clients. By bringing together multiple, world-class investment teams in a single firm, we re able to offer specialized expertise across styles and asset classes, all supported by the strength and resources of one of the world s largest asset managers. This has helped us to become a trusted partner to individual and institutional investors across the globe. Focus on Investment Excellence At the core of our firm, you ll find multiple independent investment teams each with a focused area of expertise from traditional to alternative strategies and multi-asset solutions. And because our portfolio groups operate autonomously, their strategies can be combined to deliver true style and asset class diversification. All of our investment teams share a common commitment to excellence grounded in rigorous, fundamental research and robust, disciplined risk management. Decade after decade, Franklin Templeton has applied consistent, research-driven processes seeking to deliver strong, long-term results for our clients. Global Perspective Shaped by Local Expertise In today s complex and interconnected world, smart investing demands a global perspective. Franklin Templeton pioneered international investing over 60 years ago, and our expertise in emerging markets spans more than a quarter of a century. Today, our investment professionals are on the ground across the globe, spotting investment ideas and potential risks firsthand. These locally based teams bring in-depth understanding of local companies, economies and cultural nuances, and share their best thinking across our global research network. Strength and Experience Franklin Templeton is a global leader in asset management serving clients in over 150 countries. * We run our business with the same prudence we apply to asset management, staying focused on delivering relevant investment solutions, strong long-term results and reliable, personal service. This approach, focused on putting clients first, has helped us to become one of the most trusted names in financial services. * As of September 30, Clients are represented by the total number of unitholder accounts. Not FDIC Insured May Lose Value No Bank Guarantee

3 The Strategy Over 10 Years of Income and Growth Franklin Bissett Canadian High Dividend Fund, with its emphasis on dividend-paying Canadian securities, has provided a regular stream of monthly income with less volatility than the broad Canadian equity market and aims to deliver solid returns over time Targeting a High Level of Income We invest in high-income-producing stocks of Canadian companies with a history of paying a strong dividend, which we see as a key indicator of long-term stability and growth potential. The fund targets a portfolio dividend yield that is higher than the broad Canadian equity index. 1 Investing With a Distinctive Approach to Dividends We strongly believe growth is driven by sustainable profits. As a result, we seek to identify companies with strong, consistent earnings, growing cash flow and a history of financial strength. We invest when we determine the stock is selling at an attractive price relative to the company s fair market value. Striking a Balance of Diversification and Concentration While diversification helps to spread risk, investing in a relatively concentrated portfolio allows our team s best ideas to have a meaningful impact on overall performance. We are supported by a team of sector specialists dedicated to the Canadian market. The fund typically has 30 to 50 holdings, with a heavier weighting of the team s best ideas (the top 10 to 20 stocks). At this stage of my life, I need an investment that gives me a steady stream of income without giving me a lot to worry about. And investing close to home feels right to me. 1. Portfolio dividend yield is gross of fees. The dividend yield of a stock is the total amount of dividend per share paid over the previous 12 months, divided by its current price. The dividend yield of a mutual fund is the market-weighted average of the dividend yields of all the stocks in the portfolio. This measure is gross of fees. Franklin Bissett Canadian High Dividend Fund 1

4 The Benefits 1 Monthly Income That s Consistent and Tax-Efficient The fund s monthly dividend distribution has continued uninterrupted since its inception, an important consideration for investors who rely on dependable monthly income to help meet their monthly expenses or supplement their savings. Since these monthly distributions primarily include Canadian eligible dividends, they are taxed more favourably than interest income within non-registered accounts. TAX-EFFICIENT INCOME Trailing 12-Month Distribution Rate Less Capital Gains 2 January 1, 2001 September 30, % 9.15% 9.12% 7.95% 7.83% 7.45% 6.60% 6.05% 6.06% 6.09% 5.83% 6.15% 5.23% 4.93% 4.68% YTD 2015 The fund has paid an above-average level of income in each of the last 14 years without returning initial investor capital. 2 The Power of Consistent Dividend Income The income component of dividend-paying stocks can be a key element of an investor s total return. Since June 1975, for example, dividends have accounted for 70% of total stock market returns. 3 Dividends Can Drive Greater Total Return 4 S&P/TSX Composite Index Returns September 30, 1975 September 30, 2015 $8,000,000 $6,000,000 $4,000,000 70% of S&P/TSX Composite Index returns came from dividends. $4,554,698 S&P/TSX Composite Index (Total Return including Dividend Reinvestments) $2,000,000 $0 9/75 9/83 9/91 9/99 9/07 9/15 $1,362,901 S&P/TSX Composite Price Return Index (Total Return without Dividend Reinvestments) 2. Source: Franklin Templeton Investments, as of September 30, Funds and indices used: Franklin Bissett Canadian High Dividend Fund Series A. All distribution data and calculations are excluding capital gains to reflect the payment of income and cash received from underlying securities less any expenses. The monthly distribution rate is the sum of all the income plus any return of capital paid to investors per unit during one month, divided by the fund s month-end unit price. The trailing 12-month distribution rate is the sum of the monthly distribution rates of the previous 12 months. Both distribution rates are net of all applicable fees. The price per unit for the calendar years 2001 YTD 2015 are as follows: $12.24, $12.84, $13.64, $ $17.78, $18.43, $16.22, $13.83, $10.62, $13.60, $15.09, $15.03, $15.46, $14.92 and $ As represented by the S&P/TSX Composite Index. Total return includes dividend payouts, dividend growth and any increase in price. $100,000 initial investment. The S&P/TSX Composite Index includes reinvested dividends and capital gains. 4. Source: Bloomberg, as of September 30, Franklin Bissett Canadian High Dividend Fund

5 3 Diversification Across Canadian Sectors and Market Cap The fund provides diversification across a variety of industry sectors and companies of all sizes. This approach can lead to reduced volatility by limiting the impact of the performance of one particular company or sector on the portfolio as a whole, enabling investors to seek stronger returns with less risk. By remaining diversified across various market capitalizations, the fund provides a wide range of opportunities to invest in strong businesses with attractive risk/reward profiles, regardless of their size. Industry Sector and Market Cap Allocations 5 Period Ended September 30, 2015 Financials % Energy % Industrials % Consumer Discretionary % Materials % Telecommunication Services % Utilities % Health Care % Consumer Staples % Large Cap % Small Cap % Micro Cap % Mid Cap % Top 10 Equity Holdings 6 Period Ended September 30, 2015 Canadian Imperial Bank of Commerce 6.55% Bank of Montreal Royal Bank of Canada 4.84% 5.91% Bank of Nova Scotia Artis Real Estate Investment Trust Enbridge Income Fund Holdings 3.94% 3.93% 4.66% The Toronto-Dominion Bank Crescent Point Energy Boston Pizza Royalties Power Financial 3.19% 3.17% 2.93% 2.88% 5. Source: Franklin Templeton Investments, as of September 30, Portfolio breakdowns and holdings are subject to change. Breakdown data may not add up to 100% due to rounding. Information is historical and may not reflect current or future portfolio characteristics. The portfolio manager for the fund reserves the right to withhold release of information with respect to holdings that would otherwise be included in the top 10 holdings list. Franklin Bissett Canadian High Dividend Fund 3

6 The Results Franklin Bissett Canadian High Dividend Fund A Strong Record of Success The combination of monthly income and capital growth has rewarded investors over time. For an investor who purchased $100,000 of this fund on its inception date and reinvested all the distributions in the fund since its inception, the market value of this investment would have been $289,962 as of September 30, If this same investor received the annual distribution payouts rather than reinvesting them, then the value of this investment would have been $75,356 as of September 30, Combining Monthly Income with Capital Growth 7 November 24, 2000 September 30, 2015 $500,000 $400,000 World Trade Center Attacks September 11, 2001 Run in Commodity Prices Mid 2003 Late 2007 $300,000 $200,000 $100,000 $ Franklin Bissett Canadian High Dividend Fund Series A Calendar Year Returns % 10.39% 25.77% 22.73% 15.06% -2.26% 10.82% % 7. Source: Franklin Templeton Investments, as of September 30, Assume: Lump-sum investment of $100,000 into Franklin Bissett Canadian High Dividend Fund Series A on November 24, 2000, with all distributions either cashed or reinvested, as indicated. Distribution and market value figures net of MERs. Distributions are not guaranteed, and the proportion of income and return of capital will fluctuate depending on fund returns. Distributions are not an indication of performance, rate of return, or yield. Mutual fund distributions are not guaranteed and are set and may change at the discretion of Franklin Templeton Investments Corp. 4 Franklin Bissett Canadian High Dividend Fund

7 Escalation of the Credit Crisis September 2008 European Debt Crisis October 2009 $289,962 Investment Value (Distributions Reinvested, Net of Fees) $75,356 Investment Value (Distributions Cashed, Net of Fees) YTD YTD % 30.48% -1.00% 8.87% 17.19% % % 8. Source: Morningstar Research Inc., as of September 30, All returns shown are net of fees on a calendar year basis from 2001 YTD 2015, and include reinvestment of dividends. The chart is used only to illustrate the effects of the compound growth rate and is not intended to reflect future values of the mutual fund or returns on investment in the mutual fund. Past performance does not guarantee future results. Franklin Bissett Canadian High Dividend Fund 5

8 The Power of Dollar-Cost Averaging Regular Investments May Help You Reach Your Long-Term Goals Dollar-cost averaging is a proven investment technique that may help lower the average cost of the units you purchase. For example, by investing a fixed dollar amount of $1,000 each month in Franklin Bissett Canadian High Dividend Fund, you buy more units when the price is low and fewer units when the price is high. As a result, your average unit cost may be less than the average price per unit. FRANKLIN BISSETT CANADIAN HIGH DIVIDEND FUND Monthly Investment of $1,000 November 30, 2000 September 30, 2015 $360,000 $270,000 An investor who invests $12,000 annually can take advantage of the fund s performance over time. 9 $228,655 Fund Market Value $180,000 $179,000 Total Investment Cost $90,000 $ YTD 2015 Total Investment Cost Fund Market Value Year Total Investment Cost Fund Market Value Year Total Investment Cost Fund Market Value 2000 $2,000 $2, $98,000 $109, $14,000 $15, $110,000 $164, $26,000 $29, $122,000 $228, $38,000 $50, $134,000 $237, $50,000 $75, $146,000 $271, $62,000 $100, $158,000 $330, $74,000 $109, $170,000 $287, $86,000 $133,642 YTD 2015 $179,000 $228,655 Average Unit Cost = $13.82 Average Price Per Unit = $14.42 Dollar-cost averaging can help reduce your average investment cost. Average unit cost is the adjusted cost base including reinvested distributions divided by the number of units. Average price per unit is the average of the non-weighted purchase prices during the given period. 9. Source: Franklin Templeton Investments, as of September 30, The illustration represents the performance of a hypothetical investment and is for illustrative purposes only. It does not represent the past or future performance of a Franklin Templeton mutual fund. All contributions are at month-end with the investment beginning on November 30, All information presented net of fees excludes any upfront sales charge; however, the standard fees are reflected in the fund performance. Past performance does not guarantee future results. 6 Franklin Bissett Canadian High Dividend Fund

9 Are You Looking for Income? Look for an Established Track Record of Shareholder Distributions If you count on your investments to supplement your income, two of your biggest concerns may be capital preservation and reliability. Your standard of living depends on your ability to cover monthly bills and adapt to any unexpected expenses that may arise. Franklin Bissett Canadian High Dividend Fund has a history of paying income distributions to its investors on a regular basis, while growing the investment capital. In fact, the fund has paid out a distribution every month since making its first payment in December The table below shows a $100,000 investment at the fund s inception in November While the amount has varied from month to month (as shown below), these distributions have been paid out consistently over time and without returning initial investor capital. Distribution Summary 10 As of September 30, 2015 DISTRIBUTIONS MARKET VALUE DISTRIBUTIONS Year Average Monthly Annual Cumulative Cashed Reinvested 2000 $2,671 $2,671 $2,671 $101,601 $104, $830 $9,962 $12,633 $112,189 $126, $756 $9,075 $21,708 $114,413 $139, $791 $9,490 $31,198 $133,096 $175, $763 $9,153 $40,351 $152,936 $214, $800 $9,600 $49,952 $165,658 $247, $1,809 $21,703 $71,655 $140,658 $241, $1,685 $20,217 $91,871 $135,142 $267, $1,071 $12,852 $104,723 $89,680 $200, $712 $8,547 $113,270 $111,655 $272, $617 $7,399 $120,669 $137,100 $356, $583 $6,993 $127,662 $128,826 $352, $856 $10,276 $137,938 $129,804 $383, $1,061 $12,737 $150,675 $138,790 $449, $1,281 $15,368 $166,043 $102,046 $377,712 YTD 2015 $390 $3,514 $169,557 $75,356 $289,962 Total Initial Investment $100,000 TOTAL DISTRIBUTION Paid Out To You VALUE OF FUND ACCOUNT After Distributions Were Cashed VALUE OF FUND ACCOUNT After Distributions Were Reinvested 10. Source: Franklin Templeton Investments, as of September 30, Funds and indices used: Franklin Bissett Canadian High Dividend Fund Series A. All distribution data and calculations are excluding capital gains to reflect the payment of income and cash received from underlying securities less any expenses. The monthly distribution rate is the sum of all the income plus any return of capital paid to investors per unit during one month, divided by the fund s month-end unit price. The trailing 12-month distribution rate is the sum of the monthly distribution rates of the previous 12 months. Both distribution rates are net of all applicable fees. Past performance does not guarantee future results. Franklin Bissett Canadian High Dividend Fund 7

10 Performance Results Compounded Returns 11 As of September 30, 2015 Inception Date 1-Year 3-Year 5-Year 10-Year Since Inception Franklin Bissett Canadian High Dividend Fund Series A 11/24/ % -9.31% -2.07% 1.84% 7.44% Despite some of the most challenging markets in recent memory, the fund has generated a positive return in 10 of the last 14 calendar years. Seasoned Investment Experts in Their Categories GAREY J. AITKEN, CFA Chief Investment Officer, Franklin Bissett Investment Mgmt., 23 Years Industry Experience Mr. Aitken is the chief investment officer of Franklin Bissett Investment Management and has been with Franklin Bissett since In addition to the chief investment officer responsibilities, Mr. Aitken shares co-lead manager responsibilities of the Franklin Bissett Canadian Equity Fund (2003) and other equity-oriented funds. Prior to joining Franklin Bissett, Mr. Aitken was an officer for a senior Canadian energy firm. Previous to that, he was employed with a Canadian chartered bank in a corporate lending role. Mr. Aitken holds a Bachelor of Commerce from the University of Alberta and an MBA from the University of British Columbia. He is a Chartered Financial Analyst (CFA ) Charterholder. LES STELMACH, CFA Senior Vice President, Portfolio Manager, Franklin Bissett Investment Mgmt., 16 Years Industry Experience Mr. Stelmach is a co-lead manager of Franklin Bissett Canadian High Dividend Fund (2009) and additional dividend-oriented funds. In 2012, he was named a TopGun Investment Mind by Brendan Wood International, based upon nominations submitted by Canada s leading sell-side analysts and sales professionals in the Brendan Wood Panel. Mr. Stelmach graduated from the University of Alberta and received a Bachelor of Commerce with distinction. He earned his Chartered Financial Analyst (CFA ) designation in Source: Franklin Templeton Investments, as of September 30, Past performance does not guarantee future results. CFA and Chartered Financial Analyst are trademarks owned by the CFA Institute. 8 Franklin Bissett Canadian High Dividend Fund

11 Franklin Bissett Canadian High Dividend Fund Reasons to Invest The Strategy Strives to provide a regular stream of monthly income while delivering solid returns Invests in stocks of strong Canadian companies with a history of sustainable profits and dividend payouts. Strikes a balance between diversification and concentration, allowing the team s best ideas to have a meaningful impact on overall performance. The Benefits Uninterrupted monthly dividend distribution since its inception in 2000 provides potential for a reliable source of income. Tax-efficient distributions never having paid out more than what the fund earned in cash flow. Diversification across Canadian companies of all sizes and industries helps to manage portfolio risk. The Results 1 2 A record of success for long-term investors with 7.44% annualized total return since inception. Seasoned portfolio managers, Mr. Garey Aitken and Mr. Les Stelmach, have a combined average of over 19 years of industry experience. 3 Generated cumulative distributions totaling $169,557 since inception.10 Franklin Bissett Canadian High Dividend Fund CORPORATE CLASS SERIES A, F, I, O CDN$ SERIES A, F, I, M, O, T CDN$ Series A Front End 205 Series A Front End 3568 Series A DSC 305 Series A DSC 3570 Series A Low Load 522 Series A Low Load 3569 Series F 235 Series F 3571 Series I 284 Series I 3572 Series O 115 Series M 3745 Series O 3573 Series T Front End 3574 Series T DSC 3576 Series T Low Load Franklin Bissett Canadian High Dividend Fund 9

12 Franklin Templeton Investments Corp Yonge Street, Suite 900 Toronto, ON M2N OA7 fax (416) (800) For more information on Franklin Bissett Canadian High Dividend Fund or Franklin Templeton Solutions, please call , speak to your investment advisor, or visit Indexes are unmanaged and one cannot invest directly in an index. The information presented herein is considered reliable at the present time; however, we do not represent that it is accurate or complete, or that it should be relied upon as such. The information presented herein is not a recommendation or solicitation to buy or sell securities. Mutual fund distributions are not guaranteed, are set and may change at the discretion of Franklin Templeton Investments Corp. Unlike fixed-income securities, there is no obligation to distribute any fixed amount, and reductions in, or suspensions of, distributions may occur that would reduce yield. Distributions are not an indication of performance, rate of return, or yield. Returns of capital ( ROC ) do not necessarily reflect the Fund s investment performance. ROC distributions will reduce the amount of your original investment. ROC is not immediately taxable in your hands but will reduce the adjusted cost base ( ACB ) of your units. When the ACB of your units falls below zero, capital gains taxes will be incurred. Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the prospectus or fund facts documents before investing. The indicated rates of return are historical annual compounded total returns including changes in unit value and reinvestment of all distributions and do not take into account sales, redemption, distribution or optional charges or income taxes payable by any securityholder that would have reduced returns. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated. Franklin Bissett Investment Management is part of Franklin Templeton Investments Corp. Investors should carefully consider a fund s investment risks, fees and expenses before investing. To obtain a prospectus or fund facts documents, which contains this and other information, talk to your investment advisor, call us at (800) or visit franklintempleton.ca. Please carefully read a prospectus before you invest or send money Franklin Templeton Investments Corp. All rights reserved. 205 INVE 09/15