Brompton Funds
| Objectives |
To provide a high level of monthly distributions and the opportunity for capital appreciation through investment in an actively managed portfolio of income trusts, REITs and dividend-paying equities.
The Fund was created to capitalize on the many undervalued high income investment opportunities in the income trust sector and on the expanding high income common equity market that is expected to emerge in 2011 and beyond. |
| Distributions | Monthly distribution of $0.065 per unit; $0.78 per unit p.a. |
| Portfolio | An actively managed portfolio of publicly listed or traded income trusts, REITs and dividend-paying equities. |
| Low Fees | Management fee of 1.25% of net assets per annum, which includes fees payable to the Investment Manager. 2010 management expense ratio of 1.70% (excluding issuance costs and interest expense). |
| Manager | Brompton Funds Limited |
| Investment Manager | Bloom Investment Counsel, Inc. |
| Investment Strategy | The Fund has been created to capitalize on the many undervalued high income investment opportunities in the income trust sector and on the expanding high income common equity market that the Investment Manager believes will emerge in 2011 and beyond. At inception, the portfolio will be composed primarily of income trusts to focus on undervalued investments with high distribution rates. The Investment Manager believes that since the Federal government’s October 31, 2006 decision to tax income trusts by no later than 2011, some analysts have discontinued coverage of income trusts and many retail and institutional investors have exited the income trust sector, resulting in certain income trusts becoming significantly undervalued relative to comparable common equities. The Investment Manager believes that many income trusts will continue to pay high distribution rates after converting to corporations. Consequently these investments offer the Fund the opportunity for capital appreciation and some of these investments could be take-over targets. |
| Development of High Income Common Equity Market |
The Investment Manager believes that the conversion of most income trusts into corporations will result in a broader and expanding high-income common equity market in Canada. Investors are likely to place a premium on these companies due to: (i) strong cash flows, (ii) the discipline that a high dividend rate places on management to limit investments in non-core or low cash flow businesses, and (iii) investor demand for high levels of income. As a result, high-yielding equities whose after-tax income to investors is attractive by virtue of the dividend tax credit should enjoy a cost of capital advantage over other equities. The Investment Manager believes that other high-yield equity investment opportunities will develop in addition to income trust conversions as many non-dividend or low-dividend paying equities are expected to initiate or increase dividend rates to compete against former income trusts for a lower cost of capital. |
| Leverage | The Fund may borrow up to 25% of total assets to purchase additional securities to enhance the total return of the portfolio. |
| Service Fee | A service fee of 0.40% of NAV per annum is paid quarterly to Investment Advisors |
| Eligibility | Eligible for RRSPs, DPSPs, RRIFs, RESPs and TFSAs as Canadian property |
| Redemption | Annually on the second last business day of September provided units are tendered by the last business day of August. Units may be redeemed at the option of the unitholders by tendering units of the Fund by the last business day of August for redemption on the second last business day of September ("Redemption Valuation Date"). Redemption of tendered units will be settled based on net asset value per unit on the Redemption Valuation Date, less associated costs of the redemption, including brokerage costs. Units tendered for redemption will be redeemed effective the Redemption Valuation Date and will be settled on or before the tenth business day of October, subject to the Manager's right to suspend redemptions in certain circumstances. For purposes of calculating the net asset value per unit, the value of the securities comprising the portfolio will be equal to the weighted average trading price of such securities over the last three business days of September. |
| Termination | The Fund has no termination date as investors may redeem their units at net asset value less expenses annually or sell their units on the TSX. |
| Issuer Bid/Market Repurchases | The Fund may purchase up to 10% per annum of its outstanding units at prices up to net asset value per unit. |
| Fair Investor Terms |
Strong corporate governance Commitment to low fees and overall containment No entrenched management provisions and prohibitive against dilutive equity offerings. |
| TSX Listing |
Units - CIQ.UN |
| CUSIP |
Units 136012200 |