(Bloomberg) — Investors are starting to plow funds into Toronto’s out-of-favor dividend-paying stocks after more than two years of antipathy, according to Canadian Imperial Bank of Commerce. It’s a trend that promises to grow as short-term interest rates in the country continue to be scaled back.
“A rotation back into high-yielding equities such as utilities, REITs and communications is just beginning,” Ian de Verteuil, an analyst at the bank, wrote in a research note Sunday. If rates continue to fall, his team expects Canadian investors to pour $220 billion (US$161 billion) of funds into dividend-paying stocks as they shift away from fixed income-linked products.
During Canada’s higher rate regime dividend-paying equities were passed over as investors found better returns in term deposits, high-interest savings account…
