S Split Corp. has released its Annual Report to December 31, 2014.
| SBN / SBN.PR.A Performance |
| Instrument |
One
Year |
Three
Years |
Five
Years |
| Whole Unit |
+0.04% |
+7.59% |
+5.01% |
| SBN.PR.A |
+5.38% |
+5.38% |
+5.38% |
| SBN |
-5.41% |
+10.30 |
+4.53% |
| Bank of Nova Scotia |
+3.66% |
+13.68% |
+10.35% |
| S&P/TSX Financial Index |
+13.80% |
+18.27% |
+12.17% |
Not much of an advertisement for a call-option writing strategy, is it? They’ve underperformed their underlying issue by over 5% annualized over the past five years. Not only that, the Capital Units have underperformed the common DURING A BULL MARKET! It would be interesting to perform a detailed reconciliation of the performance difference, to determine the amounts attributable to MER, option writing and Sequence of Return Risk adjustments.
Figures of interest are:
MER: 1,426,153 expenses before fund extension costs and special resolution expense divided by 53.8-million average assets (see below) is 2.65%. Ouch!
Average Net Assets: We need this to calculate portfolio yield; and it’s tricky because there were massive redemptions during the year. Preferred Share distributions of 1,509,073 @ 0.525 / share implies 2.874-million shares out on average. Average Unit Value (beginning & end of year) = (18.78 + 19.86) / 2 = 19.32. Therefore 2.874-million @ 19.32 = 55.5-million average net assets. Assets dropped substantially during the year, from 62.072-million to 22.058-million, largely due to a redemption of units on December 1, 2014, in connection with the term extension. So give the lower figure a 1/4 weighting and the higher one 3/4 (assume they were fairly liquid during the fourth quarter) and get (0.75 * 62.072 + 0.25 * 22.058) = 52.1-million average net assets. Good agreement between these two methods! Call it $53.8-million average fund assets.
Underlying Portfolio Yield: Dividends and interest income received of 2.323-million divided by average net assets of 53.8-million is 4.32%
Income Coverage: Net Investment Income (before capital gains & losses and issuance costs and resolution costs ) of $896,671 divided by Preferred Share Distributions of 1,883,142 is 59%.
This entry was posted on Monday, April 13th, 2015 at 1:40 am and is filed under Issue Comments. You can follow any responses to this entry through the RSS 2.0 feed.
You can leave a response, or trackback from your own site.
SBN.PR.A: Annual Report 2014
S Split Corp. has released its Annual Report to December 31, 2014.
Year
Years
Years
Not much of an advertisement for a call-option writing strategy, is it? They’ve underperformed their underlying issue by over 5% annualized over the past five years. Not only that, the Capital Units have underperformed the common DURING A BULL MARKET! It would be interesting to perform a detailed reconciliation of the performance difference, to determine the amounts attributable to MER, option writing and Sequence of Return Risk adjustments.
Figures of interest are:
MER: 1,426,153 expenses before fund extension costs and special resolution expense divided by 53.8-million average assets (see below) is 2.65%. Ouch!
Average Net Assets: We need this to calculate portfolio yield; and it’s tricky because there were massive redemptions during the year. Preferred Share distributions of 1,509,073 @ 0.525 / share implies 2.874-million shares out on average. Average Unit Value (beginning & end of year) = (18.78 + 19.86) / 2 = 19.32. Therefore 2.874-million @ 19.32 = 55.5-million average net assets. Assets dropped substantially during the year, from 62.072-million to 22.058-million, largely due to a redemption of units on December 1, 2014, in connection with the term extension. So give the lower figure a 1/4 weighting and the higher one 3/4 (assume they were fairly liquid during the fourth quarter) and get (0.75 * 62.072 + 0.25 * 22.058) = 52.1-million average net assets. Good agreement between these two methods! Call it $53.8-million average fund assets.
Underlying Portfolio Yield: Dividends and interest income received of 2.323-million divided by average net assets of 53.8-million is 4.32%
Income Coverage: Net Investment Income (before capital gains & losses and issuance costs and resolution costs ) of $896,671 divided by Preferred Share Distributions of 1,883,142 is 59%.
This entry was posted on Monday, April 13th, 2015 at 1:40 am and is filed under Issue Comments. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.