Wants to buy “dogs”

Q – Could you tell me the name of mutual funds that invest in “the Dogs of the Dow”? – C.Z.

A – The “Dogs of the Dow” is a long-standing investment technique that involves investing in the 10 Dow stocks that pay the highest dividends, on the theory that they are the most undervalued. As a result, the theory goes, they should outperform the over Dow Jones Industrial Average. From 1972 to 2002, the technique worked about two-thirds of the time.

There is no Canadian mutual fund that specializes in the Dow dogs. However, First Trust Portfolios Canada is currently offering a unit trust based on this strategy. It’s called The Dow 10 Strategy Trust, 2003 Portfolio and the holdings include Philip Morris, J.P. Morgan Chase, General Motors, Eastman Kodak, SBC Communications, Dupont, Honeywell, General Electric, Caterpillar, and AT&T.

You can find more information at http://www.firsttrust.ca/shared/products/FTC49.asp

I hope this helps. – G.P.

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