RE:DGS down over 3%?mouserman wrote: For some reason Quadravest seems to get a bigger premium to NAV than Brompton and certainly not sure i can see the logic there.
DGS had its highest premiums when it was priced in the $7-$8 range. The premium went over 20% in the market dip of Feb 2018 and stayed in the 20% to 30% range until the market dip of Oct 2018 when it dipped to single digits and even discounts and hasn't recovered since.
LBS, perhaps due to the weak performance of the LifeCos, has had its premium remain below 20% with much of that time in single digits with a higher NAV than FFN and FTN.
Meanwhile over at Quadravest, DFN, FFN & FTN carry the highest premium. They are priced a few dollars lower than the other splits that pay $0.10 monthly. DGS and DFN used to be fairly similar until DGS ran into trouble.
Brompton doesn't have a direct FFN/FTN equivalent. If they did it would be interesting to see where the premiums would be. Their GDV is over $10 and often trades at a discount.
If DGS can get a little stronger it can get back to higher premiums, but will probably continue as it is for a while if the market keeps going sideways.
The premium for DFN could be based on its long term record, price $10 or less and NAV in the $7 to $8 range, although its premium has fallen recently from the teens to the single digits.
Perhaps due to the strength and volatility of the underlyings, FFN & FTN keep their head above water and offer good trading. The pure Canadian bank spits (BK and SBC) have higher NAVs and lower premiums (single digits). It seems the inclusion of the US stocks makes at least some of the difference.
It makes sense to me that the highest premiuims would go to those that keep just enough above $15 and if they dip, they recover fairly quickly, with an edge going to FTN as it pays more and DFN in third as it tends to be priced higher than FFN/FTN and with a higher NAV a little more certainty.
Evidently the security of SBC, GDV, ENS and PRM with higher NAVs is not worth pushing their prices to premium levels even though they also pay $0.10 monthly (PRM $0.1031). While BK and PDV have higher NAVs, they pay a variable amount which goes down with the market, so are not as attractive as the fixed $0.10 monthly, but are usually priced closed to NAV.
LBS sits in between, the NAV has dipped lower, but still in a good range. On at least two occasions it traded at a discount, but mainly a premium in the single digits or teens which makes it a better buy for those who want to hold for income and not be concerned about the $15 threshold, at least for now.