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Life & Banc Split Corp T.LBS

Alternate Symbol(s):  LFBCF | T.LBS.PR.A

Life & Banc Split Corp. (the Fund) is a Canada-based mutual fund company. The Fund's investment objective is to provide holders of Preferred shares with fixed cumulative preferential quarterly cash distributions and to return the original issue price on the maturity date, and to provide holders of Class A shares with regular monthly cash distributions and the opportunity for growth in Net Asset Value per Class A share. To achieve these objectives, the Fund invests in a portfolio comprised of common shares of approximately six Canadian banks and four publicly traded Canadian life insurance companies. The Fund also writes covered call options and cash-covered put options in respect of the portfolio to generate additional distributable income for the Fund and/or to reduce the volatility of the Fund. The Fund's investment manager is Brompton Funds Limited.


TSX:LBS - Post by User

Comment by marcroberton Jan 19, 2023 11:01am
179 Views
Post# 35233157

RE:LBS.PR.A vs FTN.PR.A

RE:LBS.PR.A vs FTN.PR.Ainteresting, brompton seems the "brand name" or "ishares" of splits and seems to always garner higher premiums to nav (correct me if i'm wrong), maybe that explains part of it, altho not sepcifically for prefs. I remember i had a look at quadravest website a few years ago and gave it a hard pass because it looked like a barebones 90s site for a small travel agency. Still kind of underwhelming. Marketing and image are important when people are giving someone their money. Would the average investor give a million to the unshaven financial advisor who shows up in jeans and stained t-shirt or the guy in the suit? 

have never owned any of these prefs, but i'm having a look at this one. devil can be in the details though, you'd have to compare the prospectuses side by side. But ftn yield to maturity is higher with the 28 cents with the current 28 cents below maturity, something like 9% for the next 2 years if you get paid $10 in 2025 (my math might be wrong). 

On the other hand, the 7 or 8% yield will probably reset to much lower after 2025 if rates start to fall, and i would prefer to buy prefs that are trading much below redemption price than any trading at or close to it (or god forbid, above it) to capture both yield and gains. However, there arent many perpetuals left and resets are harder to analyze, but if your principal does not grow, at 7% yield (which might be 4.5% after tax) you are barely protecting against inflation these days, vs buying cm at a low for example at 54 with a 6% yield which might hit 70 in a couple of years, then your total return skyrockets and your tax rate falls because of cap gains in the mix. 

For straight capital preservation, it's not bad though, pretty steady around 9.7, worst case $6 in 08/09. Would have been a great buy, like banks and prefs. i bought a lot of bank prefs, but those all got called away sadly. enjoyed the 25% yields for a few years   
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