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 details 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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