En avant : Qu’est-ce qu’une gestionnaire de portefeuille de premier plan recherche dans les sociétés qui versent des dividendes?

[00:00:22] Kyle Cheropita: Hello, everyone and welcome to The Upside. I'm Kyle Cheropita. What does a top Fidelity portfolio manager look for in dividend-paying companies? In 2024 today's guest was rated by Morningstar as one of the top 10 female portfolio managers based on risk-adjusted returns. For Canadian investors she manages both global and U.S. funds. Today, in addition to sharing what she looks for in companies we'll hear an outlook for the remainder of the year. I'm pleased to welcome today's guest, portfolio manager Ramona Persaud. Ramona, thanks so much for joining me.

[00:00:52] Ramona Persaud: Thanks for having me.

[00:00:53] Kyle Cheropita: Let's start with the basics. What is a dividend?

[00:00:57] Ramona Persaud: A dividend is a form of cash flow that comes back to an owner of a company, in the case of a dividend-paying stock. Companies generate, ideally, run their business, generate a lot of cash off of that business. Then they have a decision about what to do with the cash. Typically they need to reinvest some of the cash to keep the growth of the business going. Ideally, they would have some of the cash left over. Of that leftover cash they would give it back to the investors or the owners of the company. You're getting a return on your ownership of the company in the form of a cash dividend.

[00:01:36] Kyle Cheropita: For Canadian investors you manage Fidelity U.S. Dividend Fund and the equity sub-portfolio of Global Dividend and Global Monthly Income, among others. I want to make sure I have that right. What do you look for in a dividend paying company?

[00:01:49] Ramona Persaud: I'm looking for typically a combination of quality, so a company that is what we consider high quality, and I'll get into that a little bit later, but also a company whose valuation, so what I'm paying for their stock, is attractive. When you combine attractive valuation with almost any other metric, including quality, you tend to improve your odds of good excess return. Back to quality, quality companies are those that tend to have some sort of competitive advantage versus everybody else who does what they do. They generate pretty good returns on their capital that they invest and they're able to sustain those advantages and therefore sustain the returns and therefore generate lots of cash flow off of the business. If we can identify companies with sustainable quality characteristics that's the first thing we look for. Then if we can buy the stocks of those companies at attractive prices, typically when there is some measure of fear in the markets in general where those stocks sell off, and you combine those two features, quality and what we call valuation, then you can make pretty good excess return over time in the stock.

[00:03:04] Kyle Cheropita: You mentioned fear there. There has been, I think, a lot of fear in the markets this year. What's the biggest surprise for you so far this year, or does nothing surprise you anymore with all the time you've spent doing this?

[00:03:18] Ramona Persaud: 2024, in retrospect now, I think was a very good, if you will, layup for 2025 in the sense that '24, to me, was characterized by lots of spikes in volatility for all kinds of different reasons. It sort of started in the spring with the French election. If you're a global investor there was volatility all over the world. There was French election in the spring and then in the early summer there was a shift in market mindset to more of a risk appetite from inflation subsiding. Then there was a violent unwind of the yen carry trade later in the summer. Then there was election volatility. There were just all these little bouts of volatility all over the place. I think that, actually, it gave us sort of reps or practice which is absorbing a lot of constant volatility which, as we then saw in 2025, continued but at a much greater magnitude. If there is, perhaps to your question, surprise in 2025 it's sort of the difference in amplitude or magnitude of the volatility in '25 versus '24. To me '24 was really good practice for what we're seeing in '25.

[00:04:36] Kyle Cheropita: I'm also curious, the volatility that we saw '24 going to '25, do you draw any parallels to prior bouts of volatility or is it all a little bit different? I will say, I remember about five years ago when COVID first hit everything you were sharing at the time about tracking flight data and seeing how that was impacting what was gonna hit in the States and kind of seeing things before they happened. I'm just curious, you've seen a lot of up and down, a lot of bouts of volatility, any parallels?

[00:05:04] Ramona Persaud: In some ways volatility is volatility is volatility. For the way that I invest volatility is an invitation to get involved in the market. Instead of something to run from it is an invitation in terms of the way that I invest. That's when the valuations that I was talking about before, that's when valuations get really interesting and there's enough fear. Volatility is a measure of fear in a way and there's enough fear in how securities are priced that you can buy those great high quality companies for prices that you would not usually get. In that sense all volatility is the same. What's different, COVID, of course, was so different from the volatility that we're seeing so far this year, any volatility we saw last year. What's different is what drives it from moment to moment. The what is driving it is what differentiates what gets cheap versus what doesn't get cheap. In the case of COVID, or even this sort of tariff related volatility of the last few months, everything sells off indiscriminately. That's what I look for. There's sort of volatility that might be specific to one area where you don't get as much opportunity or as much of an invitation. Then there's volatility that's all across the market. COVID was one. Tariffs, to some extent, is one. The global financial crisis was one. When you get really big moments the entire world sells off and then it is a massive invitation to get involved in investing.

[00:06:44] Kyle Cheropita: Would you say then that did your approach shift at all this year based on this volatility being a bit different or was it just status quo?

[00:06:51] Ramona Persaud: Did my approach shift? This is when we get into sort of some nuance in volatility. There's volatility that's a little bit more fundamentally driven. COVID was not so fundamental, tariffs may be not so fundamental, maybe something that's economically driven like interest rates or more fundamental recession flags. I have termed the volatility we've seen this year, I've termed it exogenous or more exogenous than usual. All that means is that it's a lot less predictable. That's because it's being driven by sort of politics in a way and political, let's call it negotiation maybe, that is fairly unpredictable. It seems like a lot of game theory. You can argue whether the execution is what you would read about about game theory in textbooks. The point is that it's pretty exogenous, it's pretty unpredictable. When volatility gets to be that exogenous to me there's a continuum of flexibility to conviction in how you invest. You have to lean way more flexible than conviction-oriented because you cannot predict what will happen. As we saw with tariffs we went from really aggressive tariff language, people in Canada know better than almost anyone else what that felt like, then that expanded to the whole world, really aggressive tariff language that was difficult in the markets to recently much less aggressive tariff language where you get this snap back in markets. Could anyone really predict that? No. In my mind my approach has been to be extremely flexible in order to, of course, protect downside in my portfolios but also still capture some of the upside on the turn when it's this unpredictable. That's a little different from usual.

[00:08:54] Kyle Cheropita: It sounds like it. I'm curious too now going forward what do you think for the rest of the year? Are we going to see some more continued volatility, some more swings? Is it too hard to say? I'm curious to know since you focus on both US and global your thoughts on that.

[00:09:07] Ramona Persaud: My guess is that it probably continues and it probably continues in this, what I've called, mercurial way which is sort of definitionally unpredictable. There's a way of testing the markets, testing the Treasury markets and testing the stock markets that seems to be going on. But who knows? Really, what I'm trying to do in my funds is diversify enough, that's that flexibility that I talked about. I think when you get markets like this you just diversify a lot. There's lots of ways to win with diversity. I am also trying to find companies that have more control of their destiny than average in a market like this. That would be like companies that are in the midst of an internal turnaround, an internal restructuring, a special situation company, a company that's just maybe extremely cheap so it can absorb a lot of bad news or a lot of volatility, companies that are not so tied to AI or GLP-1s. The great thing about investing globally is there is so much choice. You can go to all sorts of pockets of the world and just find a lot of relatively uncorrelated risk.

[00:10:23] Kyle Cheropita: Is there a particular region in the world that you're seeing more of those opportunities right now?

[00:10:29] Ramona Persaud: There isn't a particular region because tariffs have--

[00:10:33] Kyle Cheropita: Impacted everything.

[00:10:34] Ramona Persaud: --gone global.

[00:10:37] Kyle Cheropita: Including an island of penguins.

[00:10:37] Ramona Persaud: It's sort of a global, globally based fear. That's actually a better setup than if there are particular regions in the sense that you can really stock pick because everything gets sold off indiscriminately. You can go to all sorts of different places. At one point coming into this year, and I'll give you a recent example, the U.S. versus what I call ex-U.S., everything that's not U.S. and specifically Europe, had gotten to a really extended valuation difference. I measure things in terms of standard deviations and it had gotten to like over two standard deviations. When you go past one that's a lot of the data points, and when you get to two that's most of the data points. Once you get beyond two it's pretty rare. That was a signal. We saw that show up in how stocks performed outside of the U.S. and particularly Europe versus in the U.S. There's still some, what I call valuation dispersion between those two regions. European banks have been more interesting than U.S. banks or some parts of European consumer. I've been looking more at pair trades versus any given region versus another. Stock to stock, one stock being much cheaper than the other. A lot of times you can get European multinationals that are a lot cheaper than the U.S. equivalent. The U.S. has gotten a pretty big premium in the last decade plus. So not necessarily region specific but stock to stock to stock all over the world.

[00:12:14] Kyle Cheropita: Final question for you, I know you grew up in New York and you're in the Boston area. How are you finding Toronto? Been here for a day or so.

[00:12:22] Ramona Persaud: I love Toronto. Toronto is not new to me. We have a big community in Toronto as well. Growing up in New York the one vacation that we did every year was in August we would get in the car from New York and drive to Toronto. All of my summers growing up in New York we came to Toronto. I love Toronto, I love coming back. What I really love that reminds me of New York is it is so multicultural. It really speaks to Canadian openness and acceptance to people from all over the world, and I really appreciate that.

[00:13:01] Kyle Cheropita: I agree. Thank you so much for joining me today. I'm glad you were able to join me here in the studio while you're in town.

[00:13:05] Ramona Persaud: My pleasure.

[00:13:06] Kyle Cheropita: That's great, thank you. Thank you everyone for joining the show today. For more from us please head to fidelity.ca's investor education section. Whether you're learning investment basics or looking for more advanced knowledge we can help you become a more informed investor. You can check on articles, sign up for The Upside newsletter, get information about upcoming live webcasts and on-demand videos. Fidelity Canada on YouTube, LinkedIn and Instagram is also a great resource for more content, as well as our Fidelity Connects podcast with new 30-minute episodes dropping daily. Thanks for watching, and I hope you'll join us again on The Upside. I'm Kyle Cheropita.