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North American Financial 15 Split Corp T.FFN

Alternate Symbol(s):  FNCSF

North American Financial 15 Split Corp. is a mutual fund corporation, which invests in a portfolio of over 15 financial services companies. It offers two types of shares, such as Preferred Shares and Class A Shares. Its investment objectives with respect to preferred shares are to provide holders of preferred shares with cumulative preferential monthly cash dividends, the amount of which is fixed on an annual basis and to pay the holders of the preferred shares a certain price per preferred share on or about the termination date. Its investment objectives with respect to class A shares are to provide holders of class A shares with regular monthly cash distributions and to permit holders to participate in all growth in the net asset value of the Company for a specific price per unit, by paying holders on or about the termination date such amounts as remain in the Company after paying a specific price per preferred share. Its investment manager is Quadravest Capital Management Inc.


TSX:FFN - Post by User

Comment by Inglewoodon Dec 06, 2024 3:41pm
135 Views
Post# 36350023

RE:RE:Re Retraction

RE:RE:Re Retraction The problem, as Navgod has pointed out, is that when there is a split, the coverage ratio for payment decreases. 

Oversimplifying dramatically here, but imagine you have a fund with a total NAV of $100 and there are 10 shares outstanding. Each share can be attributed a NAV of $10 per share. Now lets say we have a 2-for-1 split. The total NAV of all the shares does not change, still $100, but now you have 20 shares and the NAV per share is now only $5. 

I think that's the worry with the retraction. Currently, the NAV attributable to the common shares is north of $8. However, if there is a split, the NAV per unit will be lowered. It may even get close to $5 per common share, which ofcourse is the threshold to pay. Regardless of whether the total NAV stays the same, a lot of people will dump their shares if the amount of safety gets materially eroded. 


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