Month End Recap:
For the month of December, the Caldwell U.S. Dividend Advantage Fund (UDA or Fund) declined -4.0% versus a decline of -1.6% for the S&P 500 Total Return Index (Index)1. From a sector standpoint, Financials, Materials, and Industrials were relative outperformers, whereas Utilities, Real Estate, and Consumer Staples underperformed.
Top performers in the month of December were New York Times (NYT), TKO Group (TKO), and eBay (EBAY)2. NYT continued to perform well as its recent quarterly results highlighted strong digital subscriber growth and improving monetization across its product portfolio. Digital-only net adds accelerated meaningfully, supported by continued engagement in bundles and non-news products such as Games, while average revenue per user increased through pricing and mix improvements. Advertising trends were also constructive, driven by strength in digital formats and growing video demand. Operating leverage improved as revenue growth outpaced costs, resulting in strong margin expansion and free cash flow generation. With a broader product ecosystem and multiple levers to drive subscriber engagement and monetization, confidence in the sustainability of top-line growth remained high. TKO rerated higher as strong earnings growth was driven by continued strength across its core live sports and entertainment assets. Performance benefited from favorable event timing, improved monetization of premium content, and solid execution across media rights, live events, sponsorship, and licensing. Integration progress across recently acquired businesses continued to unlock cost efficiencies and revenue opportunities, supporting operating leverage. EBAY performed well as execution continued to improve across its core marketplace, driving stronger performance in higher-value focus categories. Buyer engagement and average selling prices increased, supported by momentum in enthusiast-driven verticals. Platform enhancements and AI-enabled features improved conversion and retention, while operating leverage expanded as revenue growth outpaced costs. With strong free cash flow supporting ongoing share repurchases, confidence in the durability of marketplace momentum improved.
During the month of December, the Fund initiated positions in Huron Consulting Group (HURN), CACI International (CACI), and ePlus (PLUS).
HURN is a U.S. focused consulting firm serving healthcare, education, and commercial clients with a mix of consulting, managed services, and digital capability offerings. The business is largely countercyclical, benefiting from regulatory change, funding pressure, and cost inflation that drive demand for performance improvement and restructuring services. Recent shifts in U.S. healthcare and education policy have accelerated client urgency, supporting stronger consulting demand and a favorable mix shift toward higher-margin work. With utilization improving, margin tailwinds building, and a robust pipeline across its core verticals, the company is positioned for accelerating growth. CACI is a U.S. government contractor providing information solutions and mission-critical services to defense, intelligence, and federal civilian agencies. The company has strong exposure to priority spending areas such as cybersecurity, electronic warfare, space, and IT modernization, which continue to see sustained budget support. A growing backlog underpins solid revenue visibility, with a large portion of forward revenue secured or tied to re-compete programs. Margin expansion is being driven by a mix shift toward higher-value defense technology and consulting services, reinforced by expanded space and electronic warfare capabilities, supporting an improving earnings profile over time. PLUS is a provider of Information Technology (IT) solutions, offering hardware, software, and services to commercial, educational, and government customers. The company is benefiting from broad-based demand across both hardware and services, with improving mix driving operating leverage and margin expansion. Rising activity tied to networking, security, and early-stage AI deployments is supporting stronger customer spending trends. With a simplified, pure-play IT solutions model and a strong balance sheet, the company is poised to deliver consistent growth.
For the fourth quarter of 2025, UDA declined -1.1% versus a gain of 1.1% for the Index. Top contributors to the performance were Comfort Systems USA (FIX), New York Times (NYT), and Vertiv Holdings (VRT). FIX rerated higher as it reported strong momentum across its construction, service, and modular businesses, supported by record backlog and broad demand from industrial and technology customers. The modular segment remained capacity-constrained with its 3 million square feet effectively sold out, reinforcing visibility into 2026. Recent acquisitions added meaningful revenue and earnings contributions beginning in the fourth quarter of 2025, while service revenue continued to grow at a double-digit pace. With a robust opportunity pipeline, ongoing workforce expansion, and continued investment in automation and capacity, the company ended the year with reinforced confidence in its growth outlook. NYT was also among the top performers in December and was previously discussed in the monthly section above. VRT performed well as it delivered strong quarterly results with record demand for its power and cooling systems used in AI and cloud data centers. Orders rose sharply, supported by a 1.4x book-to-bill and a backlog that expanded to $9.5 billion, reflecting broad growth across large-scale data center projects. Revenue and earnings outpaced expectations, facilitated by better pricing, operating leverage, and improving profitability in key regions. The company also raised full-year guidance across sales, margins, and free cash flow, supported by continued momentum in its global pipeline and consistent backlog conversion timelines.
The Fund held an 8.5% cash weighting at month-end. While we remain mindful of the macro environment, the Fund employs a bottom-up investment approach designed to seek out attractive investment opportunities in any market. Over the long run, given its unique momentum-driven investment approach and focus on well-managed, dividend growth companies, we believe UDA is well-positioned to provide strong performance by way of both attractive regular monthly distributions and long-term capital appreciation potential. We expect that our approach to dividend growth investing should continue to provide a means of generating compelling risk-adjusted returns for our investors over the long term.
1All returns (for the fund, individual stocks and sectors) are in total return, Canadian dollar terms. All stock returns represent performance for the full period noted. All fund returns are in respect of Series F.
Standard performance as at December 31, 2025:
Caldwell U.S. Dividend Advantage Fund (Series F): 1 Year: -4.0%, 3 year: 8.2%, 5 year: 8.1%, 10 year: 8.9%, Since Inception (June 19, 2015): 8.3%.
S&P500 Total Return Index: 1 Year: 12.4%, 3 year: 23.5%, 5 year: 16.1%, 10 year: 14.7%, Since Inception (June 19, 2015): 15.0%.
Actual investments, first purchased: HURN 12/8/2025, CACI 12/8/2025, PLUS 12/8/2025.
All data is as of December 31, 2025 sourced from Morningstar Direct or S&P Capital IQ, unless otherwise indicated. Fund returns are from FundData. UDA, Index total return numbers, sector returns and individual stocks returns are in CAD terms. The Fund was first offered to the public as a closed-end investment since May 28, 2015. Effective November 15, 2018 the Fund was converted into an open-end mutual fund such that all units held were redesignated as Series F units. Performance prior to the conversion date would have differed had the Fund been subject to the same investment restrictions and practices of the current open-end mutual fund.
The information contained herein provides general information about the Fund at a point in time. Investors are strongly encouraged to consult with a financial advisor and review the Simplified Prospectus and Fund Facts documents carefully prior to making investment decisions about the Fund. Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Rates of returns, unless otherwise indicated, are the historical annual compounded 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 unitholder that would have reduced returns. Mutual funds are not guaranteed; their values change frequently and past performance may not be repeated. The payment of distributions should not be confused with a fund’s performance, rate of return or yield. If distributions paid are greater than the performance of the fund, your original investment will shrink. Distributions paid as a result of capital gains realized by a fund, and income and dividends earned by a fund, are taxable in your hands in the year they are paid. Your adjusted cost base (“ACB”) will be reduced by the amount of any returns of capital and should your ACB fall below zero, you will have to pay capital gains tax on the amount below zero.
Publication date: January 19, 2026.