LCS.PR.A : Annual Report, 2016

Brompton Lifeco Split Corp. has released its Annual Report to December 31, 2016.

LCS / LCS.PR.A Performance
Instrument One
Whole Unit +16.7% +7.9% +19.6%
LCS.PR.A +5.9%% +5.8% +6.0%
LCS +35.7% +11.2% N/A
S&P/TSX Capped Financial Index +24.2% +10.7% +15.0%
S&P/TSX Composite Index +21.1% +7.1% +8.2%

Note that the benchmarking isn’t ideal, since the Financial index will include banks, while the fund has a mandate only for insurers.

Figures of interest are:

MER: 1.03% of the whole unit value, excluding Preferred share distributions (which were largely covered by the Fund’s dividend income) and issuance costs and agents’ fees in connection with the Fund’s treasury offerings (which were paid by new subscribers of the Fund).

Average Net Assets: We need this to calculate portfolio yield; and it’s tricky because there were redemptions during the year. MER of 1.03% on Total Expenses excluding Preferred share distributions (2,951,640) and issuance costs (0) and agents’ fees (0) of $2,951.640, leaves expenses of $827,605 implies $80.35-million average net assets. Preferred Share distributions of 2,951,640 @ 0.575 / share implies 5.133-million shares out on average. Average Unit Value (beginning & end of year) = (15.34 + 17.00) / 2 = 16.17. Therefore 5.133-million @ 16.17 = 83.0-million average net assets. Good agreement between these two methods! Call it $81.7-million average fund assets.

Underlying Portfolio Yield: Dividends, interest and lending income received of 2.754-million divided by average net assets of 81.7-million is 3.37%

Income Coverage: Gross Investment Income (before capital gains & losses and issuance costs and agents’ fees ) of $2,759,028 less expenses of 827,605 is net investment income of 1,931,423 divided by Preferred Share Distributions of 2,951,640 is 65%.

Leave a Reply

You must be logged in to post a comment.