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Life & Banc Split Corp.

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  • Closing Price (Nov 12, 2019) $8.11
  • Distribution(1) $0.10
  • Distribution Rate(1) (Nov 13, 2019) 14.80%
  • Distribution Frequency Monthly
  • Management Fee 0.60%
  • NAV (Nov 07, 2019) $8.30
  • Unit NAV (Nov 07, 2019) $18.36
  • Total Assets (Oct 31, 2019) $493 Million
  • Closing Price (Nov 12, 2019) $10.38
  • Distribution $0.13625
  • Distribution Rate (Nov 13, 2019) 5.25%
  • Distribution Frequency Quarterly
  • NAV (Nov 07, 2019) $10.06
  • Unit NAV (Nov 07, 2019) $18.36
  • Total Assets (Oct 31, 2019) $493 Million
  • DBRS Rating Pfd-3

Why Invest?

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

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)
    LBS
  • CUSIP (Class A Shares)
    53184C100
  • Service Fee (Class A Shares)
    0.40%
  • Ouststanding (Class A Shares) (Nov 13, 2019)
    27,296,258
  • Ticker (Preferred Shares)
    LBS.PR.A
  • CUSIP (Preferred Shares)
    53184C118
  • Ouststanding (Preferred Shares) (Nov 13, 2019)
    27,296,258
  • Maturity Date(1)
    October 30, 2023
  • Inception Date
    October 17, 2006
  • 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 November
  • Annual Retraction Notice Deadline
    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 Non-Concurrent Retraction Date
    October 30, 2023
  • Special Retraction Notice Deadline
    September 29, 2023

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.

Life & Banc Split Corp.

Summary of Investment Portfolio as at September 30, 2019

Total Net Asset Value$486,402,596.00

Holdings

% of Portfolio% of Net Asset Value
Sun Life Financial Inc.10.7%10.8%
iA Financial Corporation10.6%10.7%
National Bank of Canada10.3%10.4%
Royal Bank of Canada10.1%10.2%
Bank of Nova Scotia (The)10.0%10.2%
Toronto-Dominion Bank (The)10.0%10.1%
Manulife Financial Corporation9.9%10.0%
Canadian Imperial Bank of Commerce9.8%9.9%
Great-West Lifeco Inc.9.3%9.5%
Bank of Montreal9.0%9.1%
Cash and short-term investments0.3%0.3%
Total100%101.2%
Performance NAV History

Annual Compound Returns(1)

YTD 1-Year 3-Year 5-Year 10-Year Since Inception(2)
Life & Banc Split Corp. - Class A 52.2% 28.5% 13.5% 10.7% 16.2% 9.5%
S&P/TSX Capped Financials Index 20.7% 14.4% 10.5% 8.5% 10.8% 7.8%
S&P/TSX Composite Index 18.0% 13.2% 6.8% 5.6% 7.3% 5.5%
Life & Banc Split Corp. - Preferred 4.6% 5.5% 5.1% 5.0% 5.1% 5.2%
S&P/TSX Preferred Share Index (0.2%) (7.7%) 2.4% (0.9%) 2.2% 1.4%
Life & Banc Split Corp. - Unit 22.0% 14.7% 8.9% 7.4% 10.2% 7.1%
2018 2017 2016 2015 2014 2013 2012 2011 2010 2009
Life & Banc Split Corp. - Class A (32.1%) 16.9% 52.7% (9.9%) 17.0% 73.3% 46.8% (32.4%) 11.9% 157.2%
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%
Life & Banc Split Corp. - Preferred 4.9% 4.9% 4.9% 4.9% 4.8% 5.3% 5.4% 5.4% 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%
Life & Banc Split Corp. - Unit (13.1%) 10.6% 24.2% (2.3%) 10.6% 30.6% 18.8% (11.1%) 8.2% 47.2%

The tables show 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 Class A share and per unit, or the redemption price per Preferred share and assumes that distributions (including deemed distributions based on the intrinsic value of the warrants at approximately the exercise date of the warrants) made by the Fund on the Class A shares, Preferred shares and units in the periods shown were reinvested (at Net Asset Value per Class A share and per unit, or the redemption price per Preferred share) in additional Class A shares, units and Preferred shares of the Fund.

The tables show the Fund’s year-by-year and compound returns on a Class A share, Preferred share and unit basis for each period indicated, compared with the S&P/TSX Capped Financials Index (‘‘Financials Index’’) and the S&P/TSX Composite Index (‘‘Composite Index’’) and the S&P/TSX Preferred Share Index (“Preferred Share Index”). The Composite Index tracks the performance, on a market weight basis, of a broad index of large-capitalization issuers listed on the TSX and the Financials Index is derived from the Composite Index based on the financials sector of the Global Industry Classification Standard. The Preferred Share Index tracks the performance, on a market weight basis, of a broad index of preferred shares trading on the Toronto Stock Exchange. The Fund passively invests on an equal weight basis in a portfolio comprised of four Canadian life insurance companies and six Canadian banks which are in both the Financials Index and the Composite Index. Since the indices have more diversified portfolios it is therefore not expected that the Fund’s performance will mirror that of the indices. Further, the Financials Index and Composite Index returns are calculated without the impact of management fees and fund expenses, whereas the performance of the Fund is calculated after deducting such fees and expenses.

Returns for Life & Banc 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

Distributions from the Fund may have tax benefits which result in higher after tax cash flow than if the income had been earned as interest income.

It is expected that the distributions on the Class A shares will be comprised of mainly capital gains and return of capital and, to a lesser extent, dividend income. Distributions on the Preferred shares are expected to be mainly characterized as dividend payments, which receive the preferential dividend tax treatment. 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 in the 2006 calendar year, and all dividends paid thereafter, 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

Class A Share

Record Date Payment Date Return of Capital Eligible Dividend Total Distribution
Oct 31, 2019 Nov 14, 2019 0.00000 0.00000 0.10000
Sep 30, 2019 Oct 15, 2019 0.00000 0.00000 0.10000
Aug 30, 2019 Sep 16, 2019 0.00000 0.00000 0.10000
Jul 31, 2019 Aug 15, 2019 0.00000 0.00000 0.10000
Jun 28, 2019 Jul 15, 2019 0.00000 0.00000 0.10000
May 31, 2019 Jun 14, 2019 0.00000 0.00000 0.10000
Apr 30, 2019 May 14, 2019 0.00000 0.00000 0.10000
Mar 29, 2019 Apr 12, 2019 0.00000 0.00000 0.10000
Feb 28, 2019 Mar 14, 2019 0.00000 0.00000 0.10000
Jan 31, 2019 Feb 14, 2019 0.00000 0.00000 0.10000
Dec 31, 2018 Jan 15, 2019 0.00000 0.00000 0.10000
Nov 30, 2018 Dec 14, 2018 0.08522 0.01478 0.10000
Total 0.08522 0.01478 1.20000
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