LFE.PR.B : Annual Report, 2018

Canadian Life Companies Split Corp. has released its Annual Report to November 30, 2018.

LFE Performance
Instrument One
Whole Units
-8.40% +3.30% +4.66% +3.66%
LFE.PR.B +6.43% +6.43% +6.43% +6.05%
Capital Units
-34.57% -2.32% +1.69% -3.46%
S&P/TSX Financial Index -1.71% +9.96% +9.22% +12.24%

It’s a pity that there is no standard index for Canadian insurers – the ‘bank’ component of the S&P/TSX Financial Index has greatly outperformed the insurers since the financial crisis.

Figures of interest are:

MER: The company reports “A separate base management expense ratio has been presented to reflect the normal operating expenses of the Company excluding any one time offering expenses. Management expense ratio is based on total expenses for the stated year and is expressed as an annualized percentage of average net asset value during the year” of 0.97%

Average Net Assets: There was no change in the number of units outstanding, so let’s just take the average of the year-beginning and year-ending NAVs, including preferred shares: (199-million + 230-million) / 2 = 214-million

Underlying Portfolio Yield: Dividends received of 7.149-million + interest of 0.128-million is 7.277-million divided by average net assets of 214-million is 3.40%

Income Coverage: Net Investment Income of 5.030-million divided by Preferred Share Distributions of 9.268-million is 54%.

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