Fund Profile

Middlefield Canadian Income 10 November 2022


Disclosure – Non-Independent Marketing Communication

This is a non-independent marketing communication commissioned by Middlefield Canadian Income. The report has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is not subject to any prohibition on the dealing ahead of the dissemination of investment research.

A new version of this profile is available. View Latest

Middlefield Canadian (LON:MCT) offers a straightforward proposition to investors: exposure to Canada, a G7 economy adjacent to the US but with a very different sector make-up to the US. The Canadian equity market has a strong culture of equity income, and MCT has a consistent dividend record. MCT’s historical dividend yield is 4.2%.

MCT’s portfolio is concentrated in energy, real estate and financials, all three being important sectors for Canadian equities. One of the biggest geopolitical issues of the last year has been energy security, and Canada is a net energy exporter that is consequently running a trade surplus. Higher energy prices have played a role in this, but Canada’s status as a stable democratic economy means it is arguably also selling stability and security to its neighbours and allies.

Canada has immigration trends that MCT’s manager, Dean Orrico, argues should secure the real estate sector as a long-term anchor of the Canadian equity market. A points-based immigration system prioritises ‘economically active’ individuals and there is a resulting shortage of housing and other real estate. This is a core area of expertise for Dean and also for Middlefield International, which runs several specialist REIT mandates alongside MCT. Canadian banks typically have high capital ratios, and the major Canadian banks held their dividends during the financial crisis and more recently during the pandemic. They are now benefitting from more profitable lending from higher interest rates.

MCT has a track record of stable dividends and has seen a strong recovery in underlying earnings since the end of the pandemic as portfolio dividends have been restored or even increased. It uses a flexible gearing facility, allowing it to navigate through different periods of volatility.

Analyst's View

MCT could provide strong diversification to an income portfolio, giving UK investors a relatively unique opportunity to gain exposure to Canada, a developed market with differentiated economic factors, such as net exports of energy and an immigration system which has a positive impact on demographics. One of the most pressing geopolitical issues of 2022, energy security, looks set to be an enduring one, and Canada provides a stable source of energy, now supplying over 50% of US oil and gas imports.

Dean notes that this year’s sell-off in REITs has created buying opportunities in some of the larger REITs already in the portfolio. Where he believes that long-term trends are still intact and balance sheets are conservative, he has been buying REIT shares at 40%-plus discounts. He also sees valuations in financials, which are at levels similar to those last seen in the financial crisis. With underlying valuations so low and MCT trading on a double-digit discount, Dean has recently increased his stake in the trust, buying 70,000 shares in October. He goes on to note that even if you adjust for technology stocks, the Canadian market trades at a P/E discount to its US neighbour of two or three turns . While there may be no short-term catalyst to close this discount, for an equity income investor, lower price ratings give greater choice when constructing a portfolio.

MCT has a historical yield of 4.2% and has consistently paid annual dividends of 5.1p per share in equal quarterly instalments since 2017. We think its diversification, steady dividends (even through the pandemic) and 13% discount could appeal to an income-seeker looking to diversify their portfolio.


  • Exposure to North American equities through a different set of companies and sectors
  • Canadian equities typically trade at lower ratings than US equities, and a higher earnings yield is positive for income investors
  • Canada is a net exporter of oil and gas, making it something of an inflation hedge


  • Gearing can exacerbate losses in market falls.
  • Canadian market is concentrated on a number of key sectors
  • Currency differences are an additional risk for income investors
Continue to Portfolio

Fund History

19 Apr 2024 Canadian dispersion
A normalisation of returns across North American equities may prove supportive of MCT…
03 Apr 2024 Fund Analysis
MCT: stable income from an overlooked equity market…
23 Jan 2024 Canada’s time to shine
MCT’s strong dividend growth and prospective rate cuts may result in the trust’s discount tightening in the year ahead…
13 Dec 2023 On a roll
Higher energy prices, strong balance sheets, and peak rates all look supportive of MCT’s energy holdings…
20 Sep 2023 Results analysis: Middlefield Canadian Income
MCT could benefit from an end to the rate hiking cycle…
06 Sep 2023 You should be dancing…
North America should be a core part of any portfolio…
22 Aug 2023 Fund Analysis
MCT: stable income from an overlooked equity market…
17 Aug 2023 Canada: lower valuations and attractive growth - Podcast: Trust Issues #21
We speak to MCT Manager Dean Orrico about the prospects for the equity income trust...
24 May 2023 Five alternatives for income investors
Watch the presentations from our event focused on trusts delivering income via a diverse range of strategies…
18 May 2023 Middlefield Canadian Income
Dean Orrico
Rewatch this webinar from our online series in May 'Alternatives for income investors' hosted by the team at Kepler Trust Intelligence 15-19 May…
Watch Recording
17 Apr 2023 Results analysis: Middlefield Canadian Income
MCT saw positive share price returns in 2022 despite a tough macro environment…
30 Mar 2023 A new frontier for income investors
The managers of Middlefield Canadian Income think valuations and a new immigration policy put this little known destination for UK investors in an attractive position…
16 Mar 2023 Diversity matters
We examine the effect of blending multiple funds within your regional allocation and find that – while the culture wars may rumble on elsewhere – the benefits of diversity for investors are unarguable…
30 Dec 2022 They’re coming to…Canada?
Large numbers of immigrants may continue to make Canadian real estate an attractive investment…
23 Dec 2022 Catch-22
The housing market is in a strange position as we head into the new year…
30 Nov 2022 Cry havoc!
Lessons from a year in which an already troubled world was savaged by the dogs of war...
10 Nov 2022 Fund Analysis
A long track record of steady dividends and unique exposure to Canadian equity income stocks makes MCT an ideal income portfolio diversifier...
10 Nov 2022 Light at the end of the tunnel
Our speakers struck an optimistic note this week as we considered the prospects for investors at the end of a difficult year…
10 Nov 2022 Slides and Audio: Middlefield Canadian Income
Download the presentation and listen to the audio from our webinar from 9 November...
12 Oct 2022 A bright spot in North America
Canada’s economy is shielded against many of the problems the world is facing today…
21 Sep 2022 Results analysis: Middlefield Canadian Income
MCT's wide discount may prove attractive to investors...
07 Sep 2022 American muscle
Beating US indices is a monumental task. We examine the closed- and open-ended North American sectors to see how they have fared…
27 Jul 2022 Has the comeback begun?
Our analysts debate whether the market has fully priced in the current inflation and looming recession…
20 Jul 2022 Ingredients for success
We identify several less conventional trusts that offer strong sources of diversification to major indices…
24 Jun 2022 Delivering returns in a financial storm
We look at three trusts that have managed to deliver returns for shareholders so far in 2022…
27 May 2022 Canadian stocks have a lot of tailwinds in their favour
Trusts like MCT may benefit from rising prices and an economic bounce back…
12 May 2022 Fund Analysis
MCT allows investors to access a high-yielding market prospering from high commodity prices at an attractive discount…
29 Apr 2022 O Canada
The North American market may act as a safe haven for investors in the near future…
27 Apr 2022 Finding value in a haystack
Non-income value strategies are becoming increasingly scarce, but the holdouts represent attractive near-term opportunities…
View all

Welcome to Kepler Trust Intelligence

Please enter a valid email address
Please enter a valid password
Please enter a valid email address
Please check your email. If an account exists you'll be sent instructions on how to reset your password.
To ensure that we are able to provide content which is appropriate for you, please tell us a little about yourself.
Please choose an option
Please enter a company name
Please enter a location name
Please choose an option
Please enter a platform
Please choose an option
Please enter a trust
The information contained herein is not for distribution and does not constitute an offer to sell or the solicitation of any offer to buy any securities in the United States to or for the benefit of any United States person (being residents of the United States or partnerships or corporations organised under the laws thereof). The investment funds referred to herein have not been registered in the United States under the Investment Company Act of 1940 and units or shares of such funds are not registered in the United States under the Securities Act of 1933.
Please confirm
Please select an option
See benefits
A free Kepler Trust Intelligence account allows you to access premium content including the ‘Kepler View’ – our verdict on the trusts we cover – and historical research so you can see how our view has changed over time. An account also unlocks useful facilities like the ‘follow’ button which lets you keep track of the trusts you’re interested in and as a logged in user you can also download PDFs of our research, and choose the layout of the page you’re reading to suit your preference. We will not share your details unless you give us permission to do so, and we won’t bombard you with emails – we only send one a week.
Please select an option
Please enter your first name
Please enter your last name
Please enter a valid email address
An account already exists with this email - have you forgotten your password?
Please enter a valid password
Please enter a valid password
How will this information be used? Your answers help us to tailor our content to relevant investment trusts, and to ensure that the asset allocation and portfolio strategy research we produce is appropriate to our userbase.
Our Website uses Cookies Cookies are small text files held on your computer. They allow us to give you the best browsing experience possible and mean we can understand how you use our site. Some cookies have already been set. You can delete and block cookies, but parts of our site won’t work without them. By using our website you accept our use of cookies. For further information please refer to the Kepler Privacy Notice.
Need help?

One more thing...

Did you know, you can 'follow' individual trusts on Kepler Trust Intelligence? Use the functions below to set up alerts and we'll send you research and updates on your chosen trusts.

Suggested trusts to follow

Browse all funds
Need help?
Current Site Kepler Trust Intelligence is produced by the investment companies team at Kepler Partners and is the UK’s premier source of detailed qualitative research on investment trusts. Absolute Hedge is a market leading UCITS research database providing proprietary research on funds, themes and strategies in the UCITS space. Kepler Liquid Strategies is a Dublin domiciled UCITS fund platform featuring a number of best-of-breed fund managers. Kepler Partners is a corporate advisory and asset raising boutique specialising in the regulated funds market in Europe and investment trusts in the UK.