Equity markets ended 2015 on a weak note as most of the major equity indexes lost value in December. The MSCI World Equities Index declined 1.8%, the MSCI Emerging Markets Index shed 2.5%, the S&P 500 Index dropped 1.8% and the Thomson Reuters Canadian Equity Index a whopping 6.5%. All these indexes lost value over the full year.

The Dividend Champions Portfolio also lost ground in December with a 2.3% decline (5.8% in U.S. dollars).

The portfolio’s volatility, though, was considerably lower than the benchmark’s (Thomson Reuters Canadian Equities Index), which is consistent with our experience of the Dividend Champions methodology. Since inception, the portfolio has beaten its benchmark almost 6%. Nevertheless, investors replicating the portfolio still lost 5.7% in Canadian dollars and even more in U.S currency.

Our star performer since inception has been Whistler Blackcomb Holdings (TSX: WB, OTC: WSBHF) with its 36% return. North West Company Inc. (TSX:NWC, OTC: NWTUF), the food retailer operating mostly in remote areas, proved to be another winner, returning 23%.

Portfolio disappointments include WestJet Airlines Ltd. (TSX: WJA, OTC: WJAVF) and Inter Pipeline Ltd. (TSX: IPL, OTC: IPPLF), which lost 24% and 25% ,respectively. Fears of industry overcapacity dragged down WestJet while Inter Pipeline got caught up in the energy bear market. We have not lost confidence in either company, however, and fully expect to recover our losses, even if it takes some time.

Despite the somewhat dismal returns in 2015, we don’t believe that the portfolio’s long-term outlook is compromised. With a current dividend yield of 4.6% and dividend growth of around 6% in 2016, the portfolio can still meet our long-term goal of returning between 8% and 15% per year on average.