The “Trump Bump” also reverberated in the Canadian equity markets, resulting in a 1.7% gain for the Dividend Champions portfolio in November measured in both Canadian and U.S. dollars. So far this year, the Dividend Champions portfolio gained 23% in U.S. dollars.

The Canadian market is also up by more than 20% in U.S. dollar terms in 2016, placing it among the best-performing markets in the world. By comparison, the S&P 500 gained 7% and the MSCI World equity index 3%.

Over the 19 months since inception of the portfolio, the Dividend Champions managed to beat its benchmark by 6%, as indicated in the table below.

The sharp rise in interest rates in November wreaked havoc among high-yielding dividend-paying stocks with the biggest damage done among real estate investment trusts, telecoms, utilities and consumer staples.

Dividend Champions holdings such as Fortis Inc. (TSX: FTS, NYSE: FTS) and BCE Inc. (TSX: BCE, NYSE: BCE) were caught in the crossfire and declined by 8% and 5%, respectively.

Stocks that are perceived to be beneficiaries of higher interest rates gained substantially during the month. Dividend Champions holdings that benefitted from this trend included two of our insurance holdings, Sun Life Financial (TSX: SLF, NYSE: SLF) and Manulife Financial (TSX: MFC, NYSE: MFC), which added 16% and 21%, respectively.

We are pleased with the strong absolute performance of the portfolio so far this year and the fact that the portfolio return since inception is now only slightly below the lower end of our 8% to 15% annual target. However, there is more work to do, and with a current dividend yield of 3.5% and growth of around 6% per year, we are comfortable that our objective will be met over the target period of 5 years or longer.

We will be spending more of our cash this month, adding 1.5% to our holding Power Corporation (TSX: POW; OTC: PWCDF). The merits of investing in Power Corp. are described at length elsewhere in the publication, but in short: we think the company is undervalued given the good quality of underlying businesses, the attractive dividend yield of 4.5% and the prospect that the considerable discount to net asset value can eventually be unlocked.