{"id":28641,"date":"2015-04-13T01:40:28","date_gmt":"2015-04-13T06:40:28","guid":{"rendered":"http:\/\/prefblog.com\/?p=28641"},"modified":"2015-04-13T01:40:28","modified_gmt":"2015-04-13T06:40:28","slug":"sbn-pr-a-annual-report-2014","status":"publish","type":"post","link":"https:\/\/prefblog.com\/?p=28641","title":{"rendered":"SBN.PR.A: Annual Report 2014"},"content":{"rendered":"

S Split Corp. has released its Annual Report to December 31, 2014<\/a>.<\/p>\n

\n\n\n\n\n\n\n\n\n
SBN \/ SBN.PR.A Performance<\/td>\n<\/tr>\n
Instrument<\/td>\nOne
Year<\/td>\n		Three
Years<\/td>\n		Five
Years<\/td>\n<\/tr>\n
Whole Unit<\/td>\n+0.04%<\/td>\n+7.59%<\/td>\n+5.01%<\/td>\n<\/tr>\n
SBN.PR.A<\/td>\n+5.38%<\/td>\n+5.38%<\/td>\n+5.38%<\/td>\n<\/tr>\n
SBN<\/td>\n-5.41%<\/td>\n+10.30<\/td>\n+4.53%<\/td>\n<\/tr>\n
Bank of Nova Scotia<\/td>\n+3.66%<\/td>\n+13.68%<\/td>\n+10.35%<\/td>\n<\/tr>\n
S&P\/TSX Financial Index<\/td>\n+13.80%<\/td>\n+18.27%<\/td>\n+12.17%<\/td>\n<\/tr>\n<\/table>\n<\/div>\n

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<\/a> adjustments.<\/p>\n

Figures of interest are:<\/p>\n

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!<\/p>\n

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.<\/p>\n

Underlying Portfolio Yield: Dividends and interest income received of 2.323-million divided by average net assets of 53.8-million is 4.32%<\/p>\n

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%.<\/p>\n","protected":false},"excerpt":{"rendered":"

S Split Corp. has released its Annual Report to December 31, 2014. SBN \/ SBN.PR.A Performance Instrument OneYear ThreeYears FiveYears 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 …<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[13],"tags":[],"class_list":["post-28641","post","type-post","status-publish","format-standard","hentry","category-issue-comments"],"_links":{"self":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/28641","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=28641"}],"version-history":[{"count":0,"href":"https:\/\/prefblog.com\/index.php?rest_route=\/wp\/v2\/posts\/28641\/revisions"}],"wp:attachment":[{"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=28641"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=28641"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/prefblog.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=28641"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}