North American Financial 15 Split Corp T.FFN

Looking at investing in this Holding

[ReitsRus]

Can someone explain to me how a high dividend like this can be paid out, seems very high and is it safe. Looking for more Monthly income as I get closer to retirement., Thx.

[EdPaquette]

This horse has been winning, but it's owner has whipped it within an inch of death.Your capital could go down 40% if you buy today and the nav falls even one penny. 

[mdoldon]

VERY risky if you are getting close to retirement.  These types of split funds pay out that high yield by relying on capital increase in the underlying fund in order to earn the income needed.  They also buy and sell covered options on those underlying stocks. There is, however, a hard limit.  If the NAV per unit falls below $10 in any month, no Dividend will be paid for that

[mdoldon]

Sorry, had to post an edit.  The payout limit is $15 per full unit (common and preferred), with $5 typically allocated to the Commons. Sorry about that

[flamingogold]

Everyone's risk tolerance is difference. Unless you expect an economic collapse worse than covid, which was the worst since WWII, the preferreds will continue to kick out monthly distributions.

[navgod]

[navgod]

The bottom line on FFN is that the risk/reward is ridiculously negative -- almost any other splitshare would be a better trade/investment. The "dividend" is not income but a return of capital. I am comfortable short adding to it today. Would also point out I am a comfortable long in FFN.pr.a and adding to my position. GLTA

[JohnWalker]

I don't know how much will be Return of Capital this year, we can't know until the end of the year. But I filed taxes for 2021 and my T5 for FFN showed that dividends last year were 100% Eligible Dividends. There was NO Return of Capital. For the record, I do not hold any FFN now (short or long) and if asked I would not advise holding FFN the current premium of price vs NAV.