Month End Recap:
For the month of May, the Caldwell U.S. Dividend Advantage Fund (UDA or Fund) gained 3.2% versus a gain of 5.8% for the S&P 500 Total Return Index (Index)¹. From a sector standpoint Information Technology, Communication Services, and Consumer Discretionary were relative outperformers, whereas Healthcare, Real Estate, and Energy underperformed.
Top performers in the month of May were Broadcom (AVGO), Interactive Brokers (IBKR), and Quanta Services (PWR)². AVGO maintained its strong performance from the prior month, driven by a series of positive catalysts including a $10 billion share buyback signaling management confidence, a sharp rebound from tariff-related declines after the Trump administration announced a 90-day pause on new tariffs, advancements in its AI-powered cybersecurity offerings, and easing trade war fears. IBKR’s surge was driven by strong business momentum, highlighted by a 43% year-over-year increase in client daily average revenue trades (DARTs), reflecting heightened trading activity and higher commission revenue. This growth signaled continued strength in client engagement and platform usage, reinforcing confidence in the company’s earnings power and long-term outlook. PWR rerated higher after delivering robust earnings, raising its full-year guidance and reporting a record $35.3 billion backlog, signaling sustained growth momentum. Strong demand across power generation, energy storage, and high-voltage transmission continues to support its outlook, while management’s confident handling of tariff risks and proactive supply chain measures further reinforced investor confidence in execution and resilience.
During the month of May, the Fund initiated positions in Microsoft (MSFT), Hamilton Lane (HLNE), O’Reilly Automotive (ORLY), and UL Solutions (ULS).
MSFT develops, licences, and sells software, services, and solutions worldwide. The company is seeing demand outpace capacity in both its AI and Azure businesses, driven by rapid enterprise adoption of cloud infrastructure and generative AI solutions. This imbalance is fueling accelerating growth, with strong forward momentum as customers scale their usage and it continues to expand its infrastructure to meet rising demand.
HLNE is an alternative investment management firm offering private markets advisory, analytics solutions, and asset management services. It specializes in designing, structuring, managing, and monitoring portfolios of private market funds and direct investments for its clients. The company benefits from strong demand as a unique way to capitalize on the secular growth of alternative asset investments. It has seen significant adoption of its traditional private equity-like products, particularly “evergreen” funds, which target the retail wealth management channel. This has driven rapid growth in fee-earning assets under management, with evergreen products now accounting for approximately 10% of total assets, compared to none just a few years ago. The continued rollout and scaling of additional evergreen products bodes well for sustained growth in fee-related earnings.
ORLY is a leading U.S. retailer and distributor of aftermarket auto parts, serving both professional installers and do-it-yourself (DIY) customers. It operates more than 5,900 stores in the U.S. With a wide product range and value-added services like diagnostics, recycling, and machine shop support, the company drives strong customer loyalty. Its nationwide store network and dual-market strategy position it well to benefit from the aging vehicle fleet and steady demand for auto maintenance. It benefits from a maintenance driven business model supported by the rising average age of vehicles, which sustains consistent demand for aftermarket parts. Additionally, it delivers strong organic growth through steady new store openings, expanding its reach and reinforcing long-term growth potential.
ULS provides testing, inspection, and certification services across a wide range of end markets through its industrial and consumer segments. Complementing this, the company also offers subscription-based software and advisory solutions through its enterprise and advisory business, helping clients manage risk, sustainability, and compliance. This dual model supports stable recurring revenue and positions it as a key enabler of safety, quality, and regulatory assurance across industries.
The Fund held a 9.5% 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 May 31, 2025:
Caldwell U.S. Dividend Advantage Fund (Series F): 1 Year: -6.6%, 3 year: 6.3%, 5 year: 7.2%, Since Inception (June 19, 2015): 7.5%.
S&P500 Total Return Index: 1 Year: 14.5%, 3 year: 17.6%, 5 year: 15.8%, Since Inception (June 19, 2015): 14.2%.
2Actual investments, first purchased: AVGO 11/15/2022, IBKR 4/10/2025, PWR 4/10/2025.
All data is as of May 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: June 18, 2025.