Premium Income Corporation has released its Annual Report to October 31, 2010.
| PIC / PIC.PR.A Performance | ||||
| Instrument | One Year |
Three Years |
Five Years |
Ten Years |
| Whole Unit | +15.07% | -0.53% | +3.17% | +5.56% |
| PIC.PR.A | +5.88% | +5.88% | +5.90% | +5.97% |
| PIC | +48.45% | -7.46% | +0.30% | +5.51% |
| S&P/TSX Diversified Banks Index | +18.52% | +3.65% | +8.45% | +11.27% |
Figures of interest are:
MER: 1.10% of the whole unit value, excluding the special resolution expense (incurred when extending term). With this expense, MER for 2010 was 1.44% – for analytical purposes, I suggest it’s best to amortize this and call the MER 1.17%.
Average Net Assets: We need this to calculate portfolio yield; unfortunately the number of units changesd, which makes it more approximate. The Net Asset Value at year end was $292.34-million, compared to $279.70 a year prior, so call it an average of $286.02-million. Total Preferred Share Distribution was $12.31-million, at $0.86/unit implies an average of $14.31-million units, at an average NAV of (20.56 + 19.15) / 2 = 19.86, so call it $284-million. This is good agreement, call the average NAV $285-million.
Underlying Portfolio Yield: Dividends and interest received of $12.4-million divided by average net assets of 285-million is 4.35%.
Income Coverage: Dividends & Interest of $12.4-million less expenses before resolution costs of $3.5-million is $8.9-million, to cover preferred dividends of $12.3-million is 72%.