Canadian General Investments: A Closed-End Natural Resource Investment

Jun.13.11 | About: Canadian General (CGRIF)

Canadian General Investments Limited (CGI) is traded on the Toronto Stock Exchange and listed in the United States under the symbol (OTCPK:CGRIF). CGI was established in 1930 and has been managed by Morgan Meighen & Associates in Toronto since 1956. The fund is leveraged with - as of 12/31/10 - $648,457,000 in gross assets and net assets of $500,049,000.

The fund has prospered because of its investment in smaller Canadian metals, mining and paper companies (26.9% of assets), its oil and gas investments (24.8% of assets) and the very fact that it is denominated in Canadian dollars which has performed well against the U.S. dollar.

Morgan Meighen also manages the following closed-end funds: Canadian World Fund Limited and Third Canadian General Investment Trust Limited. CGI sells at a lower discount (18.74% as of 6/13/11) because of its performance.

Its 10 largest holdings as of May 20, 2011, were as follows:

Labrador Iron Ore (OTCPK:LIFZF) - 4.4%
BMTC Group - 4.1%
SXC Health Solutions (SXCI) - 3.2%
Brookfield Properties (NYSE:BPO) - 2.9%
Pacific Rubiales Energy (PEGFF.PK) - 2.7%
Bank of Montreal (NYSE:BMO) - 2.6%
Enbridge (NYSE:ENB) - 2.6%
Blackpearl Resources (OTCPK:BLKPF) - 2.5%
Royal Bank of Canada (NYSE:RY) - 2.2%

CGI has always maintained a healthy dividend yield of approximately 5% per annum and has a fairly diversified portfolio, representing a broad exposure of Canadian securities. The fund has been around a very long time and has always operated on the same principals.

The closed end fund, still selling at a substantial discount, represents a fine way of obtaining a broad exposure of the finest assets that Canada offers to investors.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.