iQ Canada All Cap High Yield Model
The iQ Canada All Cap High Yield Model is built for investors who want strong income from Canadian equities, but without simply chasing the highest yields.
It focuses on companies that combine above-average dividends with size, stability, and price strength. The goal is to generate income from businesses that can sustain it, not ones that look good on yield alone.
Investment Objective
The objective is to generate higher income than the Canadian equity market while maintaining a more controlled risk profile.
The model emphasizes companies that offer:
Meaningful dividend yield
Sufficient size and liquidity
More stable price behavior
Evidence of underlying strength
Investment Process
Step One — Top Canadian stocks
Start with all Canadian-listed common stocks and keep the top 150 by market capitalization.
Step Two — Top yield
From those 150, rank by dividend yield and keep the top 50.
Step Three — Remove unstable names
From those 50, filter out stocks with elevated short-term price volatility, keeping the more stable group.
Step Four — Confirm strength
From the remaining names, rank by relative strength and trend confirmation, and keep the top 10.
The model reconstitutes on a seasonal quarterly schedule—February, May, August, and November.
Potential Benefits
This model is designed to take a more disciplined approach to income investing. It starts by focusing on larger companies, which tend to have more reliable dividend policies and better liquidity. From there, it targets higher-yielding stocks but avoids simply buying the highest yield available.
By filtering out excessively volatile names and requiring evidence of price strength, the model attempts to sidestep common yield traps—situations where a high dividend is driven by a falling stock price rather than a healthy business. The result is a portfolio that is still income-focused, but with an added layer of stability and selectivity.
The equal-weight structure also helps keep risk balanced across the portfolio, rather than relying too heavily on one or two high-yield positions.
Potential Risks
High-yield strategies always carry tradeoffs. Even with additional filters, there is still the risk of holding companies whose dividends may be cut, particularly if economic conditions change.
The model can also become concentrated in sectors that traditionally offer higher yields, such as financials, energy, or utilities. If those areas underperform, the portfolio can lag.
Because the strategy favors more stable stocks, it may fall behind during strong, growth-driven markets where higher-volatility names are leading. The concentrated nature of the portfolio also means that individual positions can have a meaningful impact on results.
Finally, the model does not adjust continuously. It follows a set schedule, which means it can remain exposed to weakening positions between updates.
Bottom Line
This is a focused, rules-based income strategy that looks to improve on traditional high-yield investing.
By combining yield, size, stability, and strength, it aims to deliver income in a more controlled and repeatable way.