Brompton Oil Split Corp. has released its Annual Report to December 31, 2017.
| OSP / OSP.PR.A Performance | ||||
| Instrument | One Year |
Since Inception |
||
| Whole Unit | -15.7% | -6.4% | ||
| OSP.PR.A | +5.1% | +5.1% | ||
| OSP | -37.8% | -18.1% | ||
| S&P/TSX Capped Energy Index | -10.6% | -2.6% | ||
Figures of interest are:
Average Net Assets: We need this to calculate portfolio yield and MER. NAV of 49.6-million in 2017, 52.2-million in 2016, average is 50.9-million.
MER: Expenses of 695,795 (not including amortization of the cost of issuance of preferred shares) on Average Net Assets of 50.9-million is 1.37% of the whole unit value.
Underlying Portfolio Yield: Dividends, interest and lending revenue(net of withholding) of 1.120-million divided by average net assets of 50.9-million is 2.20%
Income Coverage: Investment Income (as defined in “Underlying …”) of 1.120-million less expenses (as defined in “MER”) of 695,795 is 424,520 divided by Preferred Share Distributions of 1.606-million is 26%.
Ugly numbers above, got me looking at their website since I own the pref.
Downside protection is 35% as of June 7th. No class A distribution in Feb and March with NAV below $15 cutoff, have since resumed.
I notice they’re claiming a 1.31% MER.
I’ll hold off on condemning their portfolio management skills until they have a bit more of a track record, but it’s certainly not a good start.
Their claim of a 1.31% MER is credible; but it doesn’t appear to be compliant with the securities rules, which – unless they have been changed recently – insist that MER should be applied only with respect to the assets attributable to the Capital Units and that preferred share distributions be included as an expense.
A fair bit of their portfolio is in US energy companies… This must be considered when evaluating their performance. Plus there is the consideration of the exchange rate.
However, I don’t know if this helped or not….