Five things investors need to know
1. Canadian General Investments is a well-established fund with an enviable long-term performance record.
Established in 1930, Canadian General Investments (CGI) is North America’s second-oldest closed-end fund. Greg Eckel at Morgan Meighen & Associates has managed CGI’s portfolio since 2009. He aims to generate a better-than-average total return from a diversified portfolio of North American equities via prudent stock selection and timely recognition of capital gains and losses. CGI has a very strong long-term performance record. It has outperformed the Canadian market by an average 2.4 percentage points per year over the last 25 years and by an average 1.8 percentage points over the last 50 years.
2. CGI can be considered as a ‘one-stop’ shop for investment in Canada.
The manager believes that CGI can be considered as a ‘one-stop shop’ for investment in Canada. He has an unconstrained approach, within the remit that a maximum 35% of the portfolio may be held in a single sector, and Eckel invests without reference to the sector weightings of CGI’s benchmark, meaning the company’s performance may differ meaningfully from that of the S&P/TSX Composite Index. While most of the fund is invested in Canadian companies, up to 25% may be held in US-listed businesses, which are primarily in niche operations or areas that are under-represented in the Canadian market.
3. The manager employs a bottom-up stock selection process, with low portfolio turnover.
Stock selection is primarily on a bottom-up basis, although Eckel does take the macroeconomic environment into account. The manager seeks reasonably valued companies with favourable fundamentals and strong management teams. CGI’s portfolio typically has around 60 holdings, with a bias to large- and mid-sized stocks. Some of these are higher yielding, such as the Canadian banks, helping to support CGI’s own dividend payments. A notable feature of the fund is its low turnover, which averaged 7.9% over the last five years implying around a 12 and a half-year holding period.
4. The portfolio has a long-term, below-market weighting in financial stocks.
CGI has a longstanding underweight position in the financials sector, which makes up around a third of the Canadian market, as Eckel finds better opportunities in other areas. In terms of overweight exposures, there is an above-index weighting in technology, which has been beneficial to the fund’s performance. This has been helped by meaningful holdings in US-listed NVIDIA and Apple. NVIDIA has been in the portfolio since 2016, which is well before investors started focusing on the company as a potential beneficiary from the growth in artificial intelligence.
5. CGI offers a leveraged, dividend-paying portfolio at a wide discount.
CGI pays regular quarterly dividends. From 2018 to 2024, the annual dividend was increased by 4c per share (Canadian) each year and there were no special dividends. In 2025, the annual dividend is on course for a larger 8c per share year-on-year increase. Given the company’s very high level of unrealised gains, the manager believes that the strategy of rising annual dividends is sustainable.
The company has employed a leveraged strategy since its first issue of preference shares in 1998. In June 2023, the last tranche of preference shares was redeemed and the amount borrowed under the company’s margin facility was increased, rather than issue new preference shares. The current facility is C$200m.
CGI has a persistently wide discount, which may partly be due to the limited free float as 52.5% of the share base is held by inside owners. The company is unable to repurchase shares to help manage the discount as this would invalidate its favourable Canadian investment corporation tax status.
Published 24 Sept 2025
