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North West Company Inc. (The) (NWC)
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Brookfield Asset Management Ltd. Class A Limited Voting Shares (BAM)
Q: Greetings 5i,
I am looking to lower my exposure to financials and raise that of consumer staples. This does not have to be done but should result in better diversification.
Would a switch from BAM to NWC, purely for better diversification, be advisable? I note the slightly better yield on NWC.
Thanks as always
I am looking to lower my exposure to financials and raise that of consumer staples. This does not have to be done but should result in better diversification.
Would a switch from BAM to NWC, purely for better diversification, be advisable? I note the slightly better yield on NWC.
Thanks as always
5i Research Answer:
We like BAM; we think BAM is a high-quality, capital light business asset manager, similar to a “royalty business” that collects fees and distributes out most of them as dividends. BAM balances both dividend yield and growth. We would not sell BAM to switch to NWC just for diversification. Rather than a straight up switch, sector diversification could still be done over time as investors add new cash (or receive dividends) to NWC.