TSX:SRV.UN - Post by User
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flamingogoldon Jun 02, 2021 9:33am
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Post# 33309854
RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:In what world…
RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:In what world…I try to hold these splits in my TFSA to avoid the tax treatment on ROC. DFN though is one that has no ROC. I don't hold any FTN right now but according to the one of the regulars there called mouserman it is a good hold. The high distribution rate is achieved by leverage, no surprise really. But, it is something that I do not wish to take on directly. Here is a primer on which split might be good for you.
https://www.bromptongroup.com/wp-content/uploads/2018/11/Brompton_splitshareprimer.pdf BlueJay2020 wrote: Yeah, I find them a really intriguing play but not for the faint of heart - with yields that high there has to be a catch somewhere! One thing I find confusing is the potentially different tax treatment of distributions - dividends vs cap gains or ROC. Is there anywhere that provides a good summary?
I currently only have about $25k split across DFN and FTN. I think they can be used to juice portfolio yield quite dramatically, meaning the rest of your investments can be lower risk accordingly. The reality is that almost all stocks got crushed in March 2020 pretty indiscriminately - the key is making sure you know which ones are going to rebound the quickest!
flamingogold wrote: BJ, since you mentioned it, the split share scene are an active trade of mine. High risk, high reward, not for everyone for sure. DGS has been my biggest winner of all. Owned it coming out of the financial crises when rates crashed and held it up until 2019 as fiscal policy tightened.
Have to admit, my timing was really good on it. Rebought during the storm last year and now collect a 33% tax free distribution since it's all inside a TFSA. I also own some DFN which have paid a steady double digit distribution for over a decade aside from a few missed months during covid. Catch them cheap and they can reward for years.