This ETF provides monthly distributions and the opportunity for capital gains through an investment in an actively managed portfolio of large cap North American financial services companies selected by Brompton, complemented by a proprietary covered call program. Our PM team first uses a top-down analysis to identify attractive sub-sectors. Rigorous fundamental analysis focuses the portfolio on at least 15 North American Financial Services Companies (as defined herein) with a market capitalization of at least $5 billion. The PMs then actively set the level of covered call writing (up to a maximum of 33%), with the goal of optimizing distributable cash and total returns.
Why Invest In North American Financials?
North American financial companies have historicaly had strong performance during periods of rising interest rates
Brompton believes North American financial companies have strong dividend growth potential
Opportunity for Canadian investors to diversify their investment in financials
This ETF is for Investors who are:
Seeking stable monthly cash distributions
Seeking opportunity for capital appreciation and lower overall volatility of portfolio returns than would otherwise be experienced by owning securities of technology companies directly
Eligibility All registered and non-registered accounts
Risk Rating Medium
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.
(1) The manager intends to limit certain expenses to 0.95% of NAV
(2) Source: Thomson Reuters as at January 31, 2020. Reflects the weighted average ESG Score of the companies held in the portfolio. The ESG Score is an overall score of a company based on the reported information in the environmental, social and corporate governance pillars. Letter grades range from D- for the lowest ESG scores to A+ for the highest scores. See https://www.refinitiv.com/content/dam/marketing/en_us/documents/methodology/esg-scores-methodology.pdf for more information.
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Brompton North American Financials Dividend ETF
Summary of Investment Portfolio as at January 31, 2020
Total Net Asset Value$25,688,382.00
% of Portfolio
% of Net Asset Value
Bank of America Corp
JPMorgan Chase & Co
S&P Global Inc.
Goldman Sachs Group Inc.
Brookfield Asset Management Inc
National Bank of Canada
Sun Life Financial Inc
Manulife Financial Corp.
First Republic Bank
PNC Financial Services Group Inc
Royal Bank of Canada
American Express Co
CME Group Inc
Automatic Data Processing Inc
Broadridge Financial Solutions Inc
Cash and short-term investments
Other net assets (liabilities)
1)The investment portfolio may change due to ongoing portfolio transactions of the investment fund. Quarterly updates are available on the Fund's website at www.bromptongroup.com within 60 days of each quarter end.
(2) Returns are for the periods ended January 31, 2020.
The table above shows the past performance of the Fund. Past performance does not necessarily indicate how the Fund will perform in the future. The information shown is based on Net Asset Value per unit and assumes that distributions made by the Fund on its units in the period shown were reinvested at Net Asset Value per unit in additional units of the Fund.
The table above shows the ETF’s compound returns for each period indicated compared with the S&P/TSX Capped Financials Index (the “Financials Index”) and the S&P 500 Financials Index (the S&P Index”) (together the “Indices”). The Financials Index is comprised of constituents of the S&P/TSX Composite Index that are classified as members of the financial sector with individual constituents capped at 25% weight. The S&P Index is comprised of constituents of the S&P 500 Index that are classified as members of the financial sector with individual constituents capped at 25% weight. The ETF invests in at least 15 North American Financial Services companies with market capitalization of at least $5 billion. It is therefore not expected the Fund’s performance will mirror that of the Indices which have more diversified portfolios. Further, the Indices are calculated without the deduction of management fees, fund expenses and trading commissions, whereas the performance of the ETF is calculated after deducting such fees and expenses.
(3) Period from October 16, 2018 (commencement of operations) to January 31, 2020.
Returns for Brompton North American Financials Dividend ETF are unaudited.
Commissions, trailing commissions, management fees and expenses all may be associated with exchange-traded fund investments. Please read the prospectus before investing. 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 sales, redemption, distribution or optional charges or income taxes payable by any securityholder that would have reduced returns. Exchange-traded funds are not guaranteed, their values change frequently and past performance may not be repeated.
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The actual breakdown of distributions for tax purposes will be provided to unitholders annually in March. 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.
Investors may elect to automatically reinvest their distributions in additional units of the Fund and realize the benefits of compound growth. Any units acquired pursuant to the distribution reinvestment program qualify for the service fee.
The following information is applicable to holders who, for the purposes of the Income Tax Act (Canada), are resident in Canada and hold trust units as capital property. If this is not the case, a tax advisor should be consulted.
Holders of trust units outside of a RRSP, DPSP, RRIF, RESP or TFSA should expect to receive a T3 slip from their investment dealer. T3 supplementary slips will indicate Investment Income in Box 26, Foreign Non-Business Income in Box 25, Capital Gains in Box 21 and Dividend Income in Box 23 and Box 49. Dividend income 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 and is reported in Box 42.
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