Middlefield Launches Europe’s First Active Canadian Equity Income ETF on LSE

The Middlefield Canadian Enhanced Income UCITS ETF (Tickers: MCTC, MCTP) began trading on the London Stock Exchange on 19 January 2026.

The fund offers European investors a novel route to access high-income Canadian equities through a UCITS-compliant, actively managed ETF structure. It is positioned as Europe’s first actively managed Canadian equity income ETF.

ETF Specifications and Structure

The table below outlines the fund’s core details.

Investment Strategy and Portfolio Composition

The ETF is actively managed and builds on Middlefield’s 45-year history running Canadian dividend strategies. The objective is to deliver high income and long-term capital growth by investing in a concentrated portfolio of 30-50 large-cap Canadian companies.

The strategy employs a combined top-down and bottom-up approach, focusing on sectors with structural tailwinds and companies with durable cash flows, consistent dividend growth, and strong balance sheets.

The Rationale: Canadian Markets and Dividend Investing

The launch connects two established investment themes: the search for reliable income and specific opportunities in the Canadian market.

• Dividend Growth as a Strategy: Middlefield’s research underscores the long-term role of dividends in total returns. Analysis of the S&P 500 from 1994 to 2024 shows that 47% of its +1,481% total return came from dividends and their reinvestment. The firm argues that companies with a history of growing dividends are typically profitable, generate excess cash flow, and are committed to capital discipline.

• Focus on Fundamentals Over High Yield: The strategy explicitly avoids “chasing yield,” which can lead to “value traps” – companies with unsustainable payouts. Historical analysis indicates that the stocks with the very highest yields often produce below-index returns with significantly higher risk and deeper drawdowns.

• Case for Canadian Equities: The fund targets sectors where Middlefield sees multiple tailwinds: energy supported by global export demand, banks with robust capital, and real estate investment trusts (REITs) perceived to be trading at discounts. Independent analysis also highlights opportunities in specific Canadian dividend stocks within these sectors, such as pipeline operator TC Energy, diversified financial holding company Power Corporation of Canada, and industrial REITs like Dream Industrial.

Context Within the Broader ETF Market

The ETF enters a market where UK investor interest has been concentrated on a few large, passive funds. In November 2025, the most popular ETFs among investors on one major UK platform were dominated by US equity trackers and commodity products like the iShares Physical Gold ETC.

Among active ETFs available in the UK, some of the largest are research-enhanced index strategies from firms like JPMorgan. The Middlefield ETF differentiates itself through a dedicated focus on active stock selection within a single, specific geographical and income-oriented niche.

Considerations for Investors

• Active Management and Cost: The ETF’s 0.95% Total Expense Ratio (TER) is higher than passive global equity ETFs, which can charge under 0.25%. Investors pay this for active stock selection.

• Concentration Risk: The portfolio’s heavy weighting towards Canadian energy, financials, and real estate offers targeted exposure but lacks geographical or broad sector diversification. Its performance will be closely tied to these sectors and the Canadian economy.

• Currency Risk: The fund’s underlying assets are priced in Canadian dollars. The GBP-quoted share class (MCTP) does not hedge this currency exposure, so returns for UK investors will be affected by GBP/CAD exchange rate movements.

• New Fund: As a recently launched product, the ETF does not have a long-term performance track record for evaluation.

Outlook

The Middlefield Canadian Enhanced Income ETF provides a specialised tool for investors seeking actively managed exposure to Canadian dividend growers. Its success will depend on the manager’s ability to select winning stocks within its concentrated sectors and whether the thesis on Canadian market tailwinds plays out. It represents a more targeted, higher-conviction income option compared to broader global dividend ETFs.