Bullboard - Stock Discussion Forum Dividend Growth Split Corp T.DGS

Alternate Symbol(s): T.DGS.PR.A | DDWWF

The Funds investment objectives are to provide holders of Preferred shares with fixed, cumulative, preferential, quarterly cash distributions and to return the original issue price of 10.00 per Preferred share to shareholders at maturity; and to provide holders of Class A shares with regular monthly cash distributions, targeted to be at least 0.10 per Class A share, and the opportunity for... see more

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Dividend Growth Split Corp > Confidence levels on Split Corps

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Post by SmellsofMoney on Mar 10, 2021 7:03pm

Confidence levels on Split Corps

I just wanted some general guidance on these.
I've been in them some time, but now I wonder if you guys think they'll be around for a long time.

Like how can they afford to keep paying out dividends once we pass the minimum NAV? Is it really going to be this easy - play the cycles, collect dividends, rinse repeat??

I worry that one day they'll just decide not to renew anymore, and just make up a new fund, simply to lower the yield, and then I'll be forced to sell at whatever price.

Not only will I have to deal with potential losses, but then suddenly trying to figure out where to redistribute all the sudden funds.

By long time I mean 10-20 years. Thanks!

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Comment by gribbs2 on Mar 11, 2021 6:47am

Id like to know too , can anyone chime in ? Also where do we see DGS share price in the next 12 months ?

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Comment by navgod on Mar 11, 2021 9:29am

My first reaction is that for splitshares renewal risk is the least of your worries. The fund management companies like Quadravest,Brompton,etc will do everything in their power to renew their funds.In my experience of twenty+ years of trading closed end funds the only scenerio under which a fund is closed down is if the fund has shrunk to an uneconomic size, usually due to retractions ...more

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Comment by JohnWalker on Mar 11, 2021 10:52am

I'm in the process of filing my 2020 Taxes now. I received dividends in the early part of the year (before the pandemic hit) from both FTN and FFN and there was no Return of Capital for those on my T5 -- all elegible dividends. Lol, just being contrary for laughs --- you're right about ROC in probably 85% of cases.

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Comment by SmellsofMoney on Mar 11, 2021 11:40am

Thanks for the detailed response! So I'm interested why would Quadravest et al WANT to renew their funds with ones like DF and DGS, paying out 25-40% yields? How do they make money? Is this the reason why they never seem to fully recover after a crazy spike down?

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Comment by EdPaquette on Mar 11, 2021 11:56am

Quadravest and Brompton shave a tiny amount off the top. It's called management expense, so they get paid according to the size, and they want it big.

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