RE:navfisher65 wrote: The company has been collecting dividends and premiums from selling covered calls so i have trouble with this crash in the NAV over 2-3 months any thoughts?
Take a look at the underlying stock prices at the end of September and compare to today:
| | | Price | Price | | |
| Symbol | Name | 09/28/18 | 12/17/18 | Chg $ | Chg % |
| TSE:BNS | Bank of Nova Scotia | $76.99 | $71.64 | -$5.35 | -6.95% |
| TSE:RY | Royal Bank of Canada | $103.54 | $93.50 | -$10.04 | -9.70% |
| TSE:NA | National Bank | $64.51 | $57.57 | -$6.94 | -10.76% |
| WFC | Wells Fargo & Co | $52.56 | $46.61 | -$5.95 | -11.32% |
| JPM | JPMorgan Chase & Co. | $112.84 | $99.01 | -$13.83 | -12.26% |
| TSE:TD | Toronto-Dominion Bank | $78.49 | $68.80 | -$9.69 | -12.35% |
| TSE:CM | CIBC | $121.03 | $105.52 | -$15.51 | -12.82% |
| GWO | Great-West Lifeco Inc | $31.34 | $27.27 | -$4.07 | -12.99% |
| TSE:SLF | Sun Life Financial Inc | $51.35 | $43.83 | -$7.52 | -14.64% |
| FITB | Fifth Third Bancorp | $27.92 | $23.74 | -$4.18 | -14.97% |
| TSE:CIX | CI Financial Corp | $20.51 | $17.36 | -$3.15 | -15.36% |
| TSE:BMO | Bank of Montreal | $106.54 | $89.01 | -$17.53 | -16.45% |
| TSE:MFC | Manulife Financial Corp | $23.09 | $19.18 | -$3.91 | -16.93% |
| BAC | Bank of America Corp | $29.46 | $24.47 | -$4.99 | -16.94% |
| C | Citigroup Inc | $71.74 | $54.25 | -$17.49 | -24.38% |
| GS | Goldman Sachs Group | $224.24 | $168.01 | -$56.23 | -25.08% |
| TSE:AGF.B | AGF Management Ltd | $6.11 | $4.43 | -$1.68 | -27.50% |
| -15.38% | Average |
| -27.50% | Max |
| -6.95% | Min |
Every stock has fallen a minimum of 6.95% up to 27.5%, with the average -15.38%.
| 09/28/18 | | | |
| NAV | Decline % | Decline $ | = NAV |
| $16.85 | -15.38% | -$2.59 | $14.26 |
Quadravest reported the NAV as $16.85 at the end of September. An average decline of -15.38% since then equates to -$2.59 which will leave us with a NAV of $14.26. Dividends will have been received, option income received, fees paid and both dividends and distributions made and the weighting of each security varies so this is a rough number, but shows you how the NAV can drop over 2-3 months.
Quadravest reported a 6% cash weighting for FTN on Total Net Assets of $643,856,497 with a NAV of $15.90 at the end of November. This gives us $605,225,107 in equities and $38,631,390 in cash. If cash is held steady and the equities decline by 1%, here is what it will do to the NAV:
| Change | Equities | Cash | Net Asset Value | NAV |
| | $605,225,107 | $38,631,390 | $643,856,497 | $15.90 |
| 1.00% | $599,172,856 | $38,631,390 | $637,804,246 | $15.75 |
| 2.00% | $593,120,605 | $38,631,390 | $631,751,995 | $15.60 |
| 3.00% | $587,068,354 | $38,631,390 | $625,699,744 | $15.45 |
| 5.00% | $574,963,852 | $38,631,390 | $613,595,242 | $15.15 |
| 8.00% | $556,807,099 | $38,631,390 | $595,438,488 | $14.70 |
| 10.00% | $544,702,596 | $38,631,390 | $583,333,986 | $14.41 |
| 12.00% | $532,598,094 | $38,631,390 | $571,229,484 | $14.11 |
| 15.00% | $514,441,341 | $38,631,390 | $553,072,731 | $13.66 |
The Class A shares are a leveraged play on the underlying stocks. It's great when it works for you. When it works against, it can cause losses quickly.
For a comparison of Split Share Funds, see this blog: