Canadian Life Companies Split Corp. has released its Annual Report to November 30, 2013.
LFE / LFE.PR.A & LFE.PR.B Performance | |||
Instrument | One Year |
Three Years |
Five Years |
Whole Unit | +22.71% | +5.22% | +2.67% |
LFE.PR.A & LFE.PR.B | +6.43% | +5.88% | +5.68% |
LFE | +89.62% | -5.02% | -8.35% |
S&P TSX Financial Index | +25.17% | +12.64% | +15.34% |
I won’t ding them for underperforming their chosen index over the past five years because banks have strongly outperformed insurers through the period – but I will ding them for not using an index comprised of insurers only!
Figures of interest are:
MER: 2.31% of the whole unit value, excluding one time initial offering expenses. However, “Warrant Subscription Fees” … according to the Management Information Circular (SEDAR, 2012-3-21):
The Company will pay a subscription fee of $0.25 per Unit in respect of each subscription procured by a CDS Participant on behalf of their clients.
which is nice work if you can get it.
Average Net Assets: We need this to calculate portfolio yield; unfortunately the number of units changed dramatically over the year, which makes it more approximate. The Total Assets of the fund at year end was $196.0-million, compared to $112.2-million a year prior, so call it an average of $154.1-million. Total Preferred Share Distribution was $6.799-million, at $0.625/share implies an average of 10.88-million units, at an average NAV of ((14.34 + 12.48) / 2 = 13.41, so call it $145.9-million. Which is actually reasonably close, so let’s call the Average Net Assets $150-million.
Underlying Portfolio Yield: Dividends received of $4.51-million divided by average net assets of $150-million is 3.01%.
Income Coverage: Dividends of 4.51-million less expenses before Warrant Subscription Fees (because they aren’t recurring) of 1.61-million is 2.90-million, to cover preferred dividends of 6.80-million is 43%