Dividend 15 Split Corp T.DFN

Alternate Symbol(s): DVSPF | T.DFN.PR.A | DFNPF

Dividend 15 Split Corp. is a Canada-based mutual fund, which invests primarily in a portfolio of dividend yielding common shares, which includes approximately 15 Canadian companies. It offers two types of shares, including Preferred shares and Class A shares. Its investment objectives with respect to Preferred Shares are to provide holders with fixed cumulative preferential monthly cash dividends in an amount of $0.04583 per Preferred share to yield 5.5% per annum on the $10 repayment amount and to return the $10 repayment amount to their holders on the termination date. Its investment objectives with respect to Class A Shares are to provide holders with regular monthly cash distribution targeted to be $0.10 per Class A share and return the original issue price to their holders on the termination date. The net asset value per unit must remain above the required $15 per unit threshold for distributions to be declared. Its investment manager is Quadravest Capital Management Inc.

TSX:DFN - Post by User

Dividend 15 Split Corp > DFN unit nav to June 21 = approx: $14.73

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Comment by AnEducatoron Jun 24, 2024 4:43pm

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Post# 36103962

RE:RE:RE:DFN unit nav to June 21 = approx: $14.73

In general, all the split capital shares erode over time because the distributions they pay out exceed the dividends collected from their underlying portfolios. The proof is in the NAVs: Most of the capital shares were issued at $15.00, but their NAVs are now nowhere near those values.

This does not necessarily make them bad investments since markets tend to rise over the long term and the lofty payouts mitigate much of the erosion in the NAV.

It can take years for the NAV to drop below the payment threshold but once this happens, distributions cease and most investors sell, driving market prices below true value.

Commenting wrote: AnEducator - When you say "Investors need to realize that dividends on these splits is ....", to which 'splits', in particular, do you refer?

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