Brompton Group

 

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Objectives
To provide holders of Preferred shares with fixed cumulative preferential quarterly cash distributions which are currently $0.11875 per share (with a new cash distribution rate for the term from November 30, 2018 to October 30, 2023 to be announced no later than September 29, 2018) and to return the original issue price to Preferred shareholders on October 30, 2023, subject to the extension of the term for periods of up to five years as determined by the board of directors.

To provide holders of Class A shares with regular monthly cash distributions targeted to be $0.10 per share (provided the net asset value per unit, each unit consists of one Class A and one Preferred share, is in excess of $15.00) and the opportunity for growth in net asset value per Class A share

Credit Rating
Preferred shares rated Pfd-3 by DBRS

Portfolio
Portfolio consists of common shares of Canada's four largest LifeCos and Big Six Banks. The Fund may from time to time write covered call options and cash covered put options in respect of the shares held in the portfolio to generate additional returns.

Rebalancing Criteria
The portfolio will be rebalanced (i) at least annually, to adjust for changes in market value of investments; and (ii) to reflect the impact of a merger, acquisition or other significant corporate event of or affecting one or more of the securities in the portfolio.  The Fund may from time to time write covered call options to generate additional returns.

DRIP
Investors may elect to automatically reinvest their distributions in additional Class A shares of the Fund and realize the benefits of compound growth. Currently, no commissions or brokerage fees are allocated to plan participants. DRIP Plan

 

Retraction Privileges
Monthly:
Preferred shares may be retracted on a monthly basis by surrendering the Preferred shares at least 10 business days prior to the retraction date which is the second last business day of the month. The retraction price per Preferred share will be equal to 96% of the lesser of i) the net asset value per unit determined as of the relevant retraction date less the cost to the Fund of the purchase of a Class A share for cancellation, and (ii) $10.00.
Class A shares may be retracted on a monthly basis by surrendering the Class A shares at least 10 business days prior to the retraction date which is the second last business day of the month. The retraction price per Class A shares will equal 96% of the difference between (i) the net asset value per unit determined as of the relevant retraction date, and (ii) the cost to the Fund of the purchase of a Preferred share for cancellation, including commissions and such other costs to fund the purchase of the Preferred shares.
Annually:
Concurrent redemption at net asset value on the second last business day of November, provided that both Class A and Preferred shares are surrendered at least 10 business days prior to the second last business day of November, except in the year in which there is an extension of the termination date.

Special Retraction Right
Preferred Shares:
If there is an extension of the term of the Fund beyond October 30, 2023 then there is a special restraction right on October 30, 2023 equal to the lesser value of (i) $10.00 plus any accrued and unpaid distributions and (ii) the net asset value of the Fund on that date divided by the number of Preferred shares then outstanding, provided that notice is given by the last business day of the month prior to the special retraction date of the extension.
Class A Shares:
If there is an extension of the term of the Fund beyond October 30, 2023 then there is a special restraction right on October 30, 2023 equal to the greater of (i) the net asset value per unit (consisting of one Preferred share and one Class A share) minus $10.00 plus any accrued and unpaid distribution on the Preferred shares and (ii) nil, provided that notice is given by the last business day of the month prior to the special retraction date of the extension.

Symbol(s)

Class A : LBS
Preferred : LBS.PR.A

CUSIP

Class A : 53184C100
Preferred : 53184C118

Inception Date

Oct 17, 2006

Manager/Options Advisor

Brompton Funds Limited

Low Fees

Management fee of 0.60% of the net asset value per annum.  Management expense ratio of 0.95% (excluding Preferred share distributions) for the period ended June 30, 2017.

Service Fee

0.40% of the net asset value of the Class A shares per annum is paid quarterly to Investment Advisors holding Class A shares at the end of each calendar quarter.

Fair Investor Terms

Strong corporate governance
Commitment to low fees and overall cost containment
No entrenched management provisions and a prohibition against dilutive equity offerings.

Eligibility

Eligible for RRSPs, DPSPs, RRIFs, RESPs, and TFSAs.

Termination

October 23, 2023, subject to the extension of the term for periods of up to five years as determined by the board of directors.


 
PLEASE READ AND ACCEPT THESE IMPORTANT DISCLOSURES

You will usually pay brokerage fees to your dealer if you purchase or sell units of the investment fund on the Toronto Stock Exchange or alternative Canadian trading platforms (an “exchange”). If the units are purchased or sold on an exchange, investors may pay more than the current net asset value when buying units of the investment fund and may receive less than the current net asset value when selling them.

There are ongoing fees and expenses associated with owning units of an investment fund. An investment fund must prepare disclosure documents that contain key information about the fund. You can find more detailed information about the fund in the public filings available at www.sedar.com. The indicated rates of return are the historical annual compounded total returns including changes in unit value and reinvestment of all distributions and do not take into account certain fees such as redemption costs or income taxes payable by any securityholder that would have reduced returns. Investment funds are not guaranteed, their values change frequently and past performance may not be repeated.

This communication is for information purposes only and does not constitute an offer to sell or a solicitation to buy the securities referred to herein. The opinions contained in this report are solely those of Goldman Sachs Asset Management L.P. (“GSAM”) and are subject to change without notice. GSAM makes every effort to ensure that the information has been derived from sources believed to reliable and accurate. However, GSAM assumes no responsibility for any losses or damages, whether direct or indirect which arise from the use of this information. GSAM is under no obligation to update the information contained herein. The communication should not be regarded as a substitute for the exercise of your own judgment. Please read the fund’s offering documents before investing.

Certain statements contained in this document constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking information may relate to matters disclosed in this document and to other matters identified in public filings relating to the Fund, to the future outlook of the Fund and anticipated events or results and may include statements regarding the future financial performance of the Fund. In some cases, forward-looking information can be identified by terms such as “may”, “will”, “should”, “expect”, “plan”, “anticipate”, “believe”, “intend”, “estimate”, “predict”, “potential”, “continue” or other similar expressions concerning matters that are not historical facts. Actual results may vary from such forward-looking information. Investors should not place undue reliance on forward-looking statements. These forward-looking statements are made as of the date December 15, 2015 and we assume no obligation to update or revise them to reflect new events or circumstances.

Fund holdings and allocations shown are unaudited, and may not be representative of current or future investments, should not be construed and research or investment advice, and are subject to risk.

Any reference to a specific company or security does not constitute a recommendation to buy, sell, hold or directly invest in the company or its securities. It should not be assumed that investment decisions made in the future will be profitable or will equal the performance of the securities discussed in this document.

Portfolio holdings may change by the time you view this. Portfolio holdings may not be representative of future investments. The securities discussed may not represent all of the portfolio's holdings and may not be deemed representative of the strategy’s future portfolio holdings. Future portfolio holdings may not be profitable.

The portfolio risk management process includes an effort to monitor and manage risk, but does not imply low risk.

No part of this material may, without Brompton and GSAM’s prior written consent, be (i) copied, photocopied or duplicated in any form, by any means, or (ii) distributed to any person that is not an authorized recipient. This material is intended for Investment Advisor use only.

I confirm that I have read, understood, and accept the above disclosures.

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