Brompton Group

 

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Objectives
To provide holders of Preferred shares with fixed cumulative preferential quarterly cash distributions of $0.125 per share; and to return the original issue price to Preferred shareholders on March 31, 2020, 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
Approximately equal-weight portfolio of at least 15 large-capitalization North American oil and gas issuers, selected by the Manager from the S&P/TSX Composite Index and the S&P 500 Index. The Fund may from time to time write covered call options and cash covered put options in respect to the shares held in the portfolio to generate additional returns.

Rebalancing Criteria
The portfolio will be rebalanced and may be reconstituted by the Manager at least semi-annually.

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 by 5:00 pm (Toronto time) on the 10th business day 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 by 5:00 pm (Toronto time) on the 10th business day prior to the retraction date, which is the second last business day of the month. The retraction price per Class A share 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.

Annual Concurrent Retraction:
Units of equal numbers of Preferred shares and Class A shares may be concurrently retracted by surrendering the Units by 5:00 pm (Toronto time) on the 10th business day prior to the second last business day of March of each year commencing in 2016. The retraction price will be equal to the net asset value per Unit on that date, less any costs associated with the retraction, including commissions and other such costs, if any, related to the liquidation of any portion of the Portfolio required to fund such retraction.

Non-Concurrent Retraction Right:
On any maturity date, a holder of Preferred shares may retract such Preferred shares. The redemption price payable by the Fund for a Preferred share pursuant to the non-concurrent retraction right will be equal to the lesser of (i) $10.00 plus any accrued and unpaid distributions thereon and (ii) the net asset value of the Fund on that date divided by the total number of Preferred shares then outstanding.

On any maturity date, a holder of Class A shares may retract such Class A shares. The redemption price payable by the Fund for a Class A share pursuant to the non-concurrent retraction right will be equal to the greater of (i) the net asset value per unit determined on that date minus $10.00 plus any accrued and unpaid distributions on the Preferred share, and (ii) nil. The deadline for tendering is 5:00 pm (Toronto time) on the last business day of the month prior to a maturity date.

Symbol(s)

Class A : OSP
Preferred : OSP.PR.A

CUSIP

Class A : 11222H101
Preferred : 11222H200

Inception Date

Feb 24, 2015

Manager/Portfolio Manager

Brompton Funds Limited

Low Fees

Management fee of 0.70% of the net asset value per annum.  Management expense ratio of 1.37% (excluding Preferred share distributions) for the period ended December 31, 2016.

Service Fee

0.40% per annum of the net asset value of the Class A shares, paid quarterly to Investment Advisors whose clients hold Class A shares.

Fair Investor Terms

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

Eligibility

The Fund is RRSP, DPSP, RRIF, RESP, and TFSA eligible.

Termination

March 31, 2020, subject to the extension of the term for periods of up to five years as determined by the board of directors. The announcement of any extension will be made by news release at least 60 days prior to the termination date.


 
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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