Month End Recap:
For the third quarter of 2026, the Caldwell U.S. Dividend Advantage Fund (UDA or Fund) returned -11.9% versus +2.4% for the Fund’s benchmark, the S&P 500 Total Return Index1. From a sector standpoint, Energy, Information Technology, Health Care were the strongest benchmark sectors, while Real Estate, Industrials, Utilities were the weakest.
The top contributors during the third quarter were Marathon Petroleum (MPC), Acadian Asset Management (AAMI) and NVIDIA (NVDA), while the largest detractors were KLA Corporation (KLAC), Vertiv Holdings (VRT) and Applied Materials (AMAT)2.
MPC benefited from strong refining margins, supported by constrained refined-product supply and resilient demand for transportation fuels. Elevated refinery utilization, disciplined operating costs and continued shareholder distributions reinforced expectations for robust earnings and free cash flow generation. AAMI benefited from improving investor sentiment toward its quantitative investment management franchise and expectations for stronger earnings as assets under management and performance-based revenues recover. The company’s scalable operating model, disciplined expense management and capital-light business structure supported confidence in its ability to generate attractive incremental margins and shareholder returns. NVDA benefited from continued investment in artificial intelligence infrastructure, driving sustained demand for its accelerated computing platforms and networking solutions. The company’s leadership in AI hardware, expanding software ecosystem and growing inference workloads reinforced expectations for durable revenue growth and strong profitability. KLAC detracted from performance as investors reassessed the sustainability of semiconductor capital equipment spending amid elevated expectations for AI-related investment and uncertainty surrounding the broader wafer fabrication equipment cycle. Despite its strong competitive position in process control and inspection, concerns over the timing of customer spending and potential restrictions on equipment sales to China weighed on sentiment. The stock’s valuation had also become extremely stretched relative to long-term averages. VRT detracted as investors became increasingly cautious about the sustainability of elevated growth expectations tied to AI data centre infrastructure spending given a growing backlash against data centre development in the U.S. Although demand for power management and thermal solutions remains robust, concerns surrounding valuation, hyperscaler capital expenditure trends and the timing of large project deployments pressured the shares. AMAT weighed on performance amid uncertainty surrounding the outlook for semiconductor equipment spending, particularly in China and more mature semiconductor manufacturing technologies. Investor concerns about export restrictions, customer capital expenditure discipline and the pace of recovery in non-AI semiconductor markets contributed to weaker sentiment toward the stock.
For the month of September, the Caldwell U.S. Dividend Advantage Fund (UDA or Fund) returned -1.3% versus +2.0% for the Fund’s benchmark, the S&P 500 Total Return Index. From a sector standpoint Information Technology and Communication Services were the only outperformers while Real Estate, Materials, Financials were the weakest.
The leading individual contributors during the month were Marathon Petroleum Corp (discussed above), NVIDIA Corp (discussed above), Amphenol Corp (APH). APH benefited from robust demand for high-performance interconnect solutions, particularly within AI data centres, where increasingly complex computing systems require greater connectivity and higher-speed data transmission. The company’s expanding content per server, strong exposure to hyperscaler infrastructure spending and strategic acquisitions continue to support above-market revenue growth. Its diversified end-market exposure, pricing discipline and operating leverage also reinforce expectations for sustained earnings growth and margin expansion.
TRGP is a leading North American midstream company with a large natural gas and natural gas liquids gathering, processing, transportation and export network. Rising Permian production and growing domestic and global demand for natural gas liquids create a long runway for throughput growth across its integrated system. Targa’s ability to move volumes from the wellhead through fractionation and export infrastructure allows it to capture economics across the full value chain while generating largely fee-based cash flows. Recent 20-year agreements with ExxonMobil and plans for three additional Permian processing plants further improve visibility into long-term volume and EBITDA growth.
During September, the Fund initiated positions in Permian Resources (PR), Royal Gold (RGLD), Dell Technologies (DELL), Garmin (GRMN) and TD SYNNEX (SNX).
PR is an independent oil and gas producer focused on the Permian Basin. Its concentrated, low-cost inventory and operational scale create opportunities to sustain production while improving capital efficiency. Disciplined development spending and well productivity could support durable free cash flow and shareholder returns.
RGLD is a precious-metals streaming and royalty company with interests in producing and developing mines. Its asset-light model provides exposure to gold prices and production growth without directly assuming mine operating costs. New project contributions and disciplined deployment of capital could expand cash flow while preserving attractive margins.
DELL provides personal computers, servers, storage and enterprise infrastructure solutions. Demand for AI-optimized servers offers a potential growth driver as customers expand their computing capacity. Improving infrastructure mix and disciplined working-capital management could help translate higher sales into stronger profitability and cash generation.
GRMN designs and sells navigation, fitness, outdoor, aviation and marine electronics. Product innovation and a premium brand support pricing power and growth across its specialized consumer and professional markets. A diversified product portfolio and recurring upgrade cycles could sustain revenue growth and attractive operating margins.
SNX is a global technology distributor that also operates Hyve, a provider of hyperscale infrastructure integration services. Growing AI server and infrastructure programs create opportunities for substantial billings growth as new hyperscaler customers ramp. Better program maturity, margin mix and working-capital conversion could translate that growth into stronger earnings and free cash flow.
In each of the foregoing cases, the position will be monitored against operating results, valuation and evidence that the expected drivers are translating into sustainable earnings and cash flow.
The Fund held a 6.9% cash weight at quarter-end. While we remain mindful of the macroeconomic environment, the Fund employs a bottom-up investment approach designed to identify attractive company-specific opportunities. We continue to emphasize disciplined portfolio construction, fundamental catalysts and risk management with the objective of delivering compelling long-term risk-adjusted returns for investors.
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 September 30, 2026:
Caldwell U.S. Dividend Advantage Fund (Series F): 1 Year: 7.3%, 3 year: 11.6%, 5 year: 7.8%, 10 year: 8.5%, Since Inception (June 19, 2015): 8.5%.
S&P500 Total Return Index: 1 Year: 18.1%, 3 year: 24.9%, 5 year: 16.4%, 10 year: 16.2%, Since Inception (June 19, 2015): 15.5%.
2 Actual investments, first purchased: MPC 7/15/2026, AAMI 5/5/2026, NVDA 7/16/2026.
All data is as of September 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: October 19, 2026.