March 31, 2026
Commentary
Monthly Update
CANADIAN LARGE CAP LEADER SPLIT CORP. - COMPOUNDED RETURNS¹ AS OF MARCH 31, 2026 | INCEPTION DATE: FEBRUARY 22, 2024
1M |
YTD |
3M |
6M |
1YR |
Inception |
|
|---|---|---|---|---|---|---|
Canadian Large Cap Leaders Split Corp - Class A Shares |
-1.04% |
10.26% |
10.26% |
23.70% |
43.99% |
32.72% |
Canadian Large Cap Leaders Split Corp - Pref Shares |
0.68% |
1.87% |
1.87% |
3.78% |
7.71% |
7.72% |
If investors thought that 2025 was wild, the first quarter of 2026 did not offer much relief. The year began optimistically, with solid global growth indicators, resilient labour data and bullish investor sentiment. Unfortunately, by late February/early March the mood darkened. The United States and Israel launched coordinated airstrikes against Iran, justified as pre-emptive, defensive operations to destroy Iranian nuclear and missile programs and eliminate senior leaders of the regime. But retaliation was swift and surprisingly robust, with neighbouring states surrounding the Persian Gulf and US bases in the area facing an onslaught of drones and missiles. Iran also made use of its most effective weapon by closing the Strait of Hormuz, a critical chokepoint for approximately 20% of the global oil trade. From an economic perspective, the effects were almost immediate, with Brent crude spiking close to $120 per barrel (from below $70 per barrel) and WTI crude topping $115 per barrel (from below $65 per barrel).
The spike in oil prices opened the stagflation playbook, with higher inflation expectations triggering the bond market to price in two rate hikes instead of two rate cuts in 2026 and the US dollar to appreciate, both of which reduced growth expectations and therefore lowered equity market valuations as volatility measures exploded higher. Admittedly, some sectors did well during the selloff, with energy and energy-related equities rallying along with defensives such as utilities.
Given the risk of an extended oil shock, we think the markets have been remarkably well-behaved, likely because investors have been conditioned to expect a policy flip-flop from the current US administration (think the “Liberation Day” tariff rate TACO). However, we are mindful that resolving the war in the Middle East and reopening the Strait of Hormuz requires other parties to agree to terms. After decades of managing money through various cycles and crises, we are generally optimistic over the long term, but the current environment is testing our patience. In keeping with our mandate, we remain invested in a diversified portfolio of high-quality, dividend-paying Canadian companies.
Information below is specific to individual securities held in the Portfolio. It is only intended to describe key characteristics of individual holdings at a point in time and makes no inference about the return nor yield of either the Preferred Shares or the Class A Shares of the Canadian Large Cap Leaders Split Corp.
From the chart above, we can see that our positions, on average, trade at an LTM price to earnings multiple of 19.9x (excluding Brookfield Infrastructure Partners, which is typically valued on cash flow), slightly above the 5-year average price to earnings multiple of 18.8x.
However, given the portfolio’s significant exposure to the Energy and Utilities sectors, we believe that the portfolio is well positioned for the current challenging investment environment. Although we are quite pleased that our efforts have eliminated the trading discount on the Class A Shares, we still believe that the purchase of shares of NPS represents an attractive investment opportunity for those looking for exposure to the Canadian market.
Further, the Company’s strong track record of performance allowed the Company to announce a stock split of the Class A Shares (shareholders of record on February 6, 2026, received 20 additional Class A Shares for every 100 Class A Shares held). Along with the stock split, the Company was pleased to announce an increase in the Company’s monthly distribution rate on its Class A Shares from $0.1250 to $0.1800 per Class A Share, effective with the distribution payable on March 13, 2026, to shareholders at the close of business on February 27, 2026.
Finally, we would like to highlight that the Canadian Large Cap Leaders Split Corp has announced its next series of distributions, payable on April 14, 2026, to both Class A and Preferred shareholders of record at the close of business on March 31, 2026. As planned, holders of Class A Shares will receive the $0.1800 per share regular monthly dividend and holders of the Preferred Shares will receive the $0.1875 regular quarterly dividend.
As always, we appreciate the support of all those who have invested in the Canadian Large Cap Leaders Split Corp.
Until next month,
John, Jeff & Colin
Ninepoint Partners
1All returns are based on Net Asset Value per Class A share, or the redemption price plus accrued interest per Preferred share and assumes that distributions made by the Fund on the Class A shares, or Preferred shares in the period shown were reinvested in additional Class A shares and Preferred shares of the Fund as at 03/31/2026.