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Brompton Lifeco Split Corp.

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  • Closing Price (Nov 20, 2019) $5.82
  • Distribution(1) $0.075
  • Distribution Rate(1) (Nov 21, 2019) 15.46%
  • Distribution Frequency Monthly
  • Management Fee 0.60%
  • NAV (Nov 14, 2019) $6.53
  • Unit NAV (Nov 14, 2019) $16.55
  • Total Assets (Oct 31, 2019) $102 Million
  • Closing Price (Nov 20, 2019) $10.30
  • Distribution $0.15625
  • Distribution Rate (Nov 21, 2019) 6.07%
  • Distribution Frequency Quarterly
  • NAV (Nov 14, 2019) $10.02
  • Unit NAV (Nov 14, 2019) $16.55
  • Total Assets (Oct 31, 2019) $102 Million
  • DBRS Rating Pfd-3 (low)

Why Invest?

  • Approximately equal weight portfolio of common shares of Canada’s four largest publicly-listed life insurance companies (“LifeCos”)
  • LifeCos have historically delivered strong positive returns during periods of rising long term interest rates
  • Attractive distributions on Class A and Preferred Shares
  • Potential for capital appreciation for Class A shares due to leveraged exposure to the LifeCos, which have a dominant market position in Canada and significant international operations

Preferred Shares:

  • 5-year term, subject to extension for periods of up to five years, as determined by the board of directors
  • Quarterly cumulative preferred distributions (primarily eligible Canadian dividends)
  • Dividend resets at end-of-term extension, based on comparable market yields, without complicated reset formulas
  • Shareholder’s option to redeem at end-of-term, with no restrictions.

Class A Shares:

  • Monthly distributions (primarily return of capital)(1)
  • Opportunity for capital appreciation
  • Shareholder’s option to redeem at end-of-term, with no restrictions

FUND FACTS

  • Ticker (Class A Shares)
    LCS
  • CUSIP (Class A Shares)
    112216106
  • Service Fee (Class A Shares)
    0.40%
  • Ouststanding (Class A Shares) (Nov 21, 2019)
    6,384,731
  • Ticker (Preferred Shares)
    LCS.PR.A
  • CUSIP (Preferred Shares)
    112216205
  • Ouststanding (Preferred Shares) (Nov 21, 2019)
    6,384,731
  • Maturity Date(1)
    April 29, 2024
  • Inception Date
    April 18, 2007
  • Currency
    CAD
  • Manager/Portfolio Manager
    Brompton Funds Limited
  • Auditor
    PricewaterhouseCoopers LLP
  • Custodian
    CIBC Mellon Trust Company
  • Transfer Agent
    TSX Trust Company
  • Eligibility
    All registered and non-registered accounts
  • Annual Concurrent Retraction Date
    Second last business day of April
  • Annual Retraction Notice Deadline
    At least 10 business days prior to retraction date.
  • Special Non-Concurrent Retraction Date
    April 29, 2024
  • Special Retraction Notice Deadline
    March 29, 2024

Manager/Portfolio Manager

Brompton Funds, a division of Brompton Group which was founded in 2000, is an experienced investment fund manager with over $2 billion in assets under management. Brompton’s Portfolio Management team specializes in Canadian and global equity investments and is a leading manager of covered call writing strategies in Canada.

Brompton Lifeco Split Corp.

Summary of Investment Portfolio as at September 30, 2019

Total Net Asset Value$94,951,108.00

Holdings

% of Portfolio% of Net Asset Value
Industrial Alliance Insurance and Financial Services Inc.26.8%27.1%
Sun Life Financial Inc.25.6%26.0%
Manulife Financial Corporation24.0%24.4%
Great-West Lifeco Inc.22.6%22.9%
Cash and short-term investments1.0%1.0%
Total100%101.4%
Performance NAV History

Annual Compound Returns(1)

YTD 1-Year 3-Year 5-Year 10-Year Since Inception(2)
Brompton Lifeco Split Corp. - Class A 123.7% 71.3% 12.8% 9.8% 12.2% 0.4%
S&P/TSX Capped Financials Index 20.7% 14.4% 10.5% 8.5% 10.8% 6.9%
S&P/TSX Composite Index 18.0% 13.2% 6.8% 5.6% 7.3% 4.5%
Brompton Lifeco Split Corp. - Preferred 5.2% 6.2% 6.0% 6.0% 5.7% 5.6%
S&P/TSX Preferred Share Index (0.2%) (7.7%) 2.4% (0.9%) 2.2% 1.2%
Brompton Lifeco Split Corp. - Unit 30.7% 23.6% 8.7% 7.5% 8.4% 3.6%

Year-by-Year Returns

2018 2017 2016 2015 2014 2013 2012 2011 2010 2009
Brompton Lifeco Split Corp. - Class A (55.2%) 11.7% 35.7% (3.2%) 4.6% 243.2% ** (100.0%) (3.8%) 60.9%
S&P/TSX Capped Financials Index (9.2%) 13.3% 24.2% (3.0%) 12.6% 26.8% 17.1% (3.8%) 8.5% 45.8%
S&P/TSX Composite Index (8.9%) 9.1% 21.1% (8.3%) 10.6% 13.0% 7.2% (8.7%) 17.6% 35.1%
Brompton Lifeco Split Corp. - Preferred 5.9% 5.9% 5.9% 5.9% 5.6% 5.4% 6.9% 3.9% 5.4% 5.4%
S&P/TSX Preferred Share Index (7.9%) 13.6% 7.0% (14.9%) 6.8% (2.6%) 5.5% 5.8% 7.7% 27.0%
Brompton Lifeco Split Corp. - Unit (18.1%) 8.1% 16.7% 2.4% 5.1% 48.6% 29.9% (28.8%) 2.6% 18.8%

Returns for Brompton Lifeco Split Corp. are unaudited.

You will usually pay brokerage fees to your dealer if you purchase or sell shares of the investment fund on the Toronto Stock Exchange or other alternative Canadian trading system (an “exchange”). If the shares are purchased or sold on an exchange, investors may pay more than the current net asset value when buying shares 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 shares 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 share value and reinvestment of all distributions and does 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.

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Distributions

For the purposes of the Income Tax (Canada) and any similar provincial legislation, to the extent that distributions on either the Class A or Preferred shares are characterized as dividend payments, the Company designates any and all dividends paid on both its Class A and Preferred shares as “eligible dividends” unless the Company indicates otherwise.

The annual breakdown of distributions for tax purposes will be provided to shareholders annually in February. This information will also be posted on the website as soon as it is available.

This information is of a general nature only and does not constitute legal or tax advice to any particular investor. Accordingly, prospective investors are advised to consult their own tax advisors with respect to their individual circumstances.

DRIP Plan

Tax Allocation

The following information is applicable to holders who, for the purpose of the Income Tax Act (Canada), are resident in Canada and hold shares as capital property outside of an RRSP, RRIF or DPSP. Shareholders should receive a T5 slip from their investment dealer providing this information.

T5 supplementary slips will indicate Capital Gains Dividends in Box 18 and Actual Amount of Eligible Dividends in Box 24. Dividend incomes is subject to the standard gross-up and federal dividend tax credit rules.

The return of capital component is a non-taxable amount that serves to reduce the adjusted cost base of the Fund units.

Select a year

Preferred Share

Record Date Payment Date Return of Capital Eligible Dividend Total Distribution
Oct 31, 2019 Nov 14, 2019 0.00000 0.00000 0.15625
Jul 31, 2019 Aug 15, 2019 0.00000 0.00000 0.15625
Apr 30, 2019 May 14, 2019 0.00000 0.00000 0.14389
Jan 31, 2019 Feb 14, 2019 0.00000 0.00000 0.14375
Oct 31, 2018 Nov 14, 2018 0.00000 0.14375 0.14375
Jul 31, 2018 Aug 15, 2018 0.00000 0.14375 0.14375
Apr 30, 2018 May 14, 2018 0.00000 0.14375 0.14375
Jan 31, 2018 Feb 14, 2018 0.00000 0.14375 0.14375
Oct 31, 2017 Nov 14, 2017 0.00296 0.14079 0.14375
Jul 31, 2017 Aug 15, 2017 0.00296 0.14079 0.14375
Apr 28, 2017 May 12, 2017 0.00296 0.14079 0.14375
Jan 31, 2017 Feb 14, 2017 0.00296 0.14079 0.14375
Total 0.01184 1.13816 1.75014
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