Research : Split Shares

As many will have noticed, Operating Retractibles, as a group, are getting more expensive all the time. In many cases, they are trading with a negative yieldToWorst and even when these worst-case-scenarios are positive, they yield less than Canadas after tax while retaining all their corporate risk.

The preferred shares issued by split-share corporations may be of interest to many who want a retractible investment … and I’ve written an introduction to this type of preferred share:

Look for the Research Link!

The cogniscenti will have noticed that Malachite Aggressive Preferred Fund has been known to hold a lot of these.

I have uploaded portfolio evaluations for the draft HIMI Preferred Indices for December 29, 2006, for the Operating Retractible and Split Share indices.

Update 2007-11-22: See Split Share and OpRet Yields for some updated yield numbers and a fascinating discussion in the comments.

2 Responses to “Research : Split Shares”

  1. […] A perplexed reader of my article on Split-Shares has eMailed to query: Your article on Split Shares in Canadian Moneysaver indicates that “Asset Coverage Ratio” is an important metric. Could you provide some┬ádetails on how you calculate the asset coverage ratio? Is it simply the total NAV divided by the call price of the Preferred split? […]

  2. […] ratings woes were highlighted in an article I wrote about Split Shares; the fund’s preferreds serve as an object lesson that you can’t simply ignore the […]

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