Month End Recap:
For the month of June, the Caldwell U.S. Dividend Advantage Fund (UDA or Fund) outperformed its benchmark, returning 8.7% versus 2.0% for the S&P 500 Total Return Index (Index)1. From a sector standpoint, Industrials, Health Care and Financials were top performers while Communication Services, Energy and Consumer Discretionary were relative underperformers.
Top performers in the month of June were KLA Corp. (KLAC), Lam Research (LRCX) and Applied Materials (AMAT)2. Rapid improvement in artificial intelligence (AI) model capabilities and the proliferation of agentic AI have expanded the number of useful tasks AI can perform, especially in professional settings. Coding was the first breakthrough use case and remains the largest share of overall token consumption; however, new products from leading AI companies have allowed AI to handle more complex computer use tasks, including automating day-to-day work across Excel, PowerPoint and other productivity software on which much of the white-collar economy is built. Consumer penetration also continues to increase alongside daily time spent; however, estimates suggest daily consumer use penetration is still only ~15-20% of all adults that actively use the internet. All of this has contributed to exponential growth in token consumption. We find it interesting that the current compute shortage is primarily driven by a small group of power users and companies. With model capability improvements accelerating and use cases rapidly growing, we believe it is still very early days in terms of AI’s full potential and the related infrastructure buildout needed to support usage on a global basis. To that end, this month’s top performers are the critical tools that enable the proliferation of AI by supporting output growth in the semiconductor industry. The current demand backdrop provides some of the best visibility in the top performer’s operating histories, and extreme technical complexity contributes to strong competitive advantages for these businesses. Additionally, as the installed base of wafer fabrication equipment (WFE) grows, so do the service businesses of the top performers. Services are contract-based with very high renewal rates and offer a stable revenue stream to offset the more cyclical equipment side of the business, which should lead to lower earnings volatility over time.
During the month of June, the Fund initiated positions in Marriot International (MAR), Ross Stores (ROST), Casey’s General Store (CASY), Applied Industrial Technologies (AIT), JB Hunt Transportation (JBHT), Leonardo DRS (DRS), Old Dominion Freight (ODFL), United Rentals (URI), WW Grainger (GWW), Applied Materials (AMAT), Carpenter Technology (CRS), Linde PLC (LIN), Materion (MTRN) and Ryman Hospitality Properties (RHP).
MAR is a global hospitality company that operates, franchises, and licenses lodging properties, MAR leverages an asset-light franchising model to generate high-margin, predictable royalty fees with minimal capital expenditure. Its massive loyalty program (Bonvoy) drives sticky direct bookings and minimizes reliance on expensive third-party travel agencies, while resilient global travel demand and a robust unit pipeline cushion long-term revenue per available room (RevPAR) growth.
ROST is an off-price retail chain offering brand-name apparel and home fashion at deep discounts, ROST benefits from persistent macroeconomic trade-down behavior that continuously shifts consumer traffic toward off-price value options. Its highly flexible opportunistic buying model capitalizes on manufacturer overstock to secure premium inventory at deeply discounted costs, while steady physical footprint expansion into underpenetrated regions provides a reliable runway for market-share gains.
CASY is a Midwestern convenience store operator renowned for its freshly prepared pizza and fuel stations, CASY holds a dominant positioning within rural markets that establishes it as a primary grocery and food provider insulated from fast-food competition. Aggressive private-label expansion and a scaled digital rewards app continuously elevate gross margins and basket sizes, while disciplined fuel-margin management and a programmatic M&A roll-up strategy drive highly predictable cash flow compounding.
AIT is a leading distributor of industrial motion, fluid power, and automation components, AIT captures major multi-year tailwinds from North American manufacturing reshoring and supply chain localization that drive steady volume demand. A structural shift into highly engineered, margin-accretive automation solutions lifts mix profitability away from commoditized distribution, while a fragmented core market provides ample room to deploy capital into accretive bolt-on acquisitions.
JBHT is a North American transportation and logistics provider specializing in intermodal and dedicated shipping, JBHT controls a dominant rail-partnership network that uniquely positions it to capture long-term highway-to-rail freight conversion trends. Multi-year corporate outsourcing contracts provide highly visible, defensive revenue insulation within its dedicated contract carriage segment, while cyclical freight volume stabilization drives massive operating leverage across its extensive private container fleet.
DRS is a mid-tier defense electronics provider specializing in naval power, advanced sensing, and computing systems, DRS maintains clear alignment with high-priority Pentagon modernization initiatives that secure an insulated, multi-year funding runway. Its proprietary technology for next-generation naval electric propulsion systems positions it perfectly for the U.S. Navy’s long-term ship buildout, while easing supply chain friction unlocks operational bottlenecks to drive margin expansion on a record order backlog.
ODFL is a premier less-than-truckload (LTL) motor carrier utilizing an integrated, nationwide network, ODFL commands best-in-class on-time service and industry-low cargo claim ratios that grant it superior premium pricing power over competitors. A disciplined capital strategy focused on continuous capacity expansion ensures it captures highly profitable market share during volume spikes, while high structural efficiency consistently delivers an industry-leading operating ratio and exceptional free cash flow.
URI is the largest equipment rental company in the world, serving industrial and construction sectors, URI utilizes its unrivaled scale and fleet depth to easily dominate massive infrastructure, manufacturing, and data center mega-projects. Rapidly scaling its high-margin specialty rental segments increases overall blend margins and customer cross-selling, while a structural corporate transition away from fleet ownership toward equipment rental permanently lifts baseline utilization rates.
GWW is a broad-line distributor of maintenance, repair, and operating (MRO) supplies, GWW deploys a deeply integrated inventory management model that creates high switching costs and locks in large enterprise accounts. The high-growth, digital-first Zoro segment captures fragmented small-business spend at minimal marginal cost, while exceptional pricing power and countercyclical cash flows provide a highly defensive profile during macro contractions.
AMAT is a premier semiconductor equipment manufacturer providing materials engineering solutions for chip fabrication, AMAT holds an indispensable footprint in gate-all-around (GAA) and advanced packaging architectures that ensures critical capex capture from global foundries. Escalating layout complexity in AI logic and high-bandwidth memory (HBM) requires a high density of materials deposition steps, while a multi-billion-dollar services and maintenance backlog creates a highly visible, recurring subscription revenue baseline.
CRS is a specialty producer of premium titanium, nickel, and cobalt alloys used in aerospace and defense, CRS capitalizes on a structural multi-year backlog in commercial aerospace manufacturing that locks in robust volume demand for high-strength materials. Severe industry-wide structural capacity constraints grant it unprecedented, multi-year pricing power over its customer base, while production asset optimization drives rapid margin expansion as the corporate mix pivots toward ultra-premium alloys.
LIN is the world’s largest industrial gas company, supplying atmospheric and process gases globally, LIN operates an integrated on-site pipeline model utilizing long-term take-or-pay contracts that fully insulate cash flow from cyclical downturns. Its leading position in massive carbon capture and clean hydrogen projects secures structural exposure to global clean energy capex, while strict operational execution and embedded inflation escalators ensure highly reliable, long-term earnings compounding.
MTRN is a global producer of advanced engineered materials, including beryllium alloys and precision optics, MTRN commands a virtual monopoly on specialized beryllium alloys that anchors its placement across defense, aerospace, and semiconductor manufacturing nodes. Expanding demand for high-performance thermal management and optical systems drives structural product mix improvements, while newly completed operational capacity expansions unlock higher manufacturing efficiencies to boost EBITDA margins.
RHI is a specialized lodging real estate investment trust (REIT) focused on group-oriented convention hotels, RHP operates large, self-contained convention resorts that create an economic moat by booking high-spending corporate groups several years in advance. This unique business model yields heavy non-room revenue exposure (food, entertainment, and meetings) that boosts monetization per key, while targeted capital expansions at flagship properties unlock strong structural average daily rate (ADR) growth.
Quarterly Performance
For the second quarter of 2026, UDA outperformed its benchmark, returning 17.2% vs a return of 17.1% for the Index. Top performance contributors were KLAC, LRCX and Comfort Systems USA (FIX)2. The thesis for KLAC and LRCX were discussed in the monthly performance section. FIX is also a key enabler of the AI buildout through its mechanical and electrical contracting services. The company’s first quarter earnings were exceptional and build upon earnings momentum in recent quarters. Their 20% upside surprise to revenue and 54% upside surprise to earnings were the largest beats of the last three years. Backlog grew 81% year over year and now exceeds $12 billion providing solid medium term revenue visibility. Lastly, the company remains in an extremely favourable environment such that they can select the highest margin work which has contributed to significant margin expansion over the last year. We remain bullish on the company’s long-term prospects considering significant capital expenditure growth in the AI ecosystem.
The Fund held an 7% 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.
1 All 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 June 30, 2026:
Caldwell U.S. Dividend Advantage Fund (Series F): 1 Year: 35.6%, 3 year: 15.7%, 5 year: 11.0%, 10 year: 10.7%, Since Inception (June 19, 2015): 9.9%.
S&P500 Total Return Index: 1 Year: 27.2%, 3 year: 23.4%, 5 year: 16.5%, 10 year: 16.5%, Since Inception (June 19, 2015): 15.6%.
2 Actual investments, first purchased: KLAC 10/15/2025, LRCX 3/25/2026, AMAT 6/11/2026, FIX 5/1/2025.
All data is as of June 30, 2026 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: July 10, 2026.