MAY PORTFOLIO UPDATE

MIDDLEFIELD CANADIAN INCOME PCC (LON:MCT)

All information is at 31 May 2021 and unaudited

¹ Based on four quarterly interim dividends of 1.275p per share paid 31 January 2020, 30 April 2020, 31 July 2020, 30 October 2020, and based on the share price as at close of business on 31 December 2020.

² Ongoing charges represent the management fee and all other operating expenses excluding interest as a % of average shareholders' funds for the year ended 31 December 2020.

Performance with Net Income Reinvested

Source: Middlefield, Bloomberg.

Dean Orrico, representing the Investment Manager, noted:

Markets continued to move higher in May with the S&P 500, MSCI World and TSX Composite adding 0.7%, 1.5% and 3.5%, respectively. The Fund's unit price appreciated by 4.1% and is at a 5-year high.

The impressive 3.5% return generated by the TSX Composite this month, or 2.5% in British Pounds, resulted in Canada's equity market surpassing the total return of the S&P 500 year-to-date. As at May 30th, Canada had administered at least one vaccine dose to almost 60% of its population which is narrowly trailing the U.K. and represents the second highest rate among G7 nations. In response, provincial governments across the country have begun to formalize plans for reopening the economy including Alberta's "Open For Summer" plan which could see virtually all Covid-related restrictions lifted by the end of June.

Our outlook on Canadian equities remains positive and we expect continued momentum in the second half of the year. The Fund has increased its weighting in Canadian equities to over 90% from 65% in May 2020. Furthermore, as a result of the positive momentum in Canada, the Canadian dollar has appreciated by 1.6% relative to the British Pound and over 5% relative to the U.S. dollar this year.

Canadian banks reported blowout fiscal Q2 results. Operating cash earnings of $14.4 billion were 2.5 times higher than last year's $5.7 billion, largely reflecting lower credit loss provisions. Bank of Montreal, Bank of Nova Scotia and National Bank of Canada returned 10.1%, 8.8% and 6.3% in May, respectively. All three companies represent top 10 positions in the Fund's portfolio. Looking ahead, the outlook for banks remains positive as reserve ratios are well above required minimums and earnings per share are expected to continue their upward trajectory in 2022.

On June 1st, Pembina Pipeline Corporation, a long-held core position in the Fund, announced an agreement to acquire Inter Pipeline (IPL) for $8.3 billion. The proposed arrangement will combine two highly connected and complementary businesses and create one of the largest energy infrastructure companies in Canada with a diversified and integrated asset base. As part of the transaction, they are also significantly increasing their commitment to ESG, including reducing the carbon intensity of their combined operations.  The announcement follows a hostile takeover attempt from Brookfield Infrastructure during the first quarter of 2021 which was not supported by IPL's management. Its Board of Directors has recommended that shareholders support the strategic transaction with Pembina in exchange for shares of the pro-forma entity. Ultimately, we believe IPL shareholders will vote in favour of the friendly business combination with Pembina in recognition of the significant potential growth opportunities and operational synergies. Pembina's share price has appreciated by over 6% since the agreement was announced. 

Enquiries:

Notes to Editors

Middlefield Canadian Income PCC aims to provide long term returns through dividend income and capital growth from a diversified portfolio of predominantly Canadian equity income securities and US stocks. The Company has been listed since 2006 as London's only listed Canadian equity income fund.

For more information on the Company, please visit our website:

http://www.middlefield.co.uk/mcit.htm