Brompton Lifeco Split Corp. has released its Annual Report to December 31, 2018.
| LCS / LCS.PR.A Performance | |||||
| Instrument | One Year |
Three Years |
Five Years |
Ten Years |
Since Inception |
| Whole Unit | -18.1% | +1.1% | +2.2% | +6.7% | +1.5% |
| LCS.PR.A | +5.9% | +5.9% | +5.9% | +5.6% | +5.6% |
| LCS | -55.2% | -12.1% | -7.2% | +6.2% | -6.2% |
| S&P/TSX Capped Financial Index | -9.2% | +8.5% | +6.9% | +12.2% | +5.7% |
| S&P/TSX Composite Index | -8.9% | +6.4% | +4.1% | +7.9% | +3.4% |
Note that the benchmarking isn’t ideal, since the Financial index will include banks, while the fund has a mandate only for insurers.
Figures of interest are:
MER: The MER per unit of the Fund, excluding Preferred share distributions (which were largely covered by the Fund’s dividend income), was 0.98% in 2018, down from 1.05% in 2017 as a result of better fixed-cost absorption.
Average Net Assets: We need this to calculate portfolio yield; and it’s tricky because “The Fund completed a treasury offering of Class A shares and Preferred shares for aggregate gross proceeds of approximately $38.6 million on February 6, 2018.”. Preferred Share distributions of 4,055,809 @ 0.575 / share implies 7.054-million shares out on average. Average Unit Value (beginning & end of year) = (16.82 + 12.71) / 2 = 14.76. Therefore 7.054-million @ 14.76 = 104.1-million average net assets.
Underlying Portfolio Yield: Dividends, interest and lending income received of 4.249-million divided by average net assets of 104.1-million is 4.08%
Income Coverage: Gross Investment Income (before capital gains & losses) of $4.250-million less expenses of 1.818-million is net investment income of $2.432-million divided by Preferred Share Distributions of 4.056-million is 60%.