Dividend 15 Split Corp T.DFN

DFN unit nav to June 21 = approx: $14.73

[mouserman]

Showing a loss of 5 cents since the JUNE 14th udpate.
Trading at a  discount now as the exodus out of  DFN has mostly  been exhausted.
Last trade was @ $4.61

[AnEducator]

My calculations are just half a cent above yours, MM, at ~$14.735, so we are in line. The discount on the shares stands at ~$0.09 after accounting for accrued dividends on the preferred shares. Investors need to realize that dividends on these splits is generally not sustainable over the long term. However, after any prolonged duration of non-payment, the NAV should recover sufficiently to begin

[Commenting]

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

[AnEducator]

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

[AnEducator]

It is essential to point out that fund managers also charge their requisite management fee which obviously has a deleterious effect on the NAV. Please note that I am not dissuading anyone from purchasing these funds. At the right time and price, they can be fabulous investments.

[mouserman]

In most cases the dividends collected by the SPLIT fund, barely cover the payout to preferreds shares. IN DFN 's case the , their preferred shares have the lowest payout of those in Quadravest, and not by just a little. FFN's  payout  annually is 95 cents  and has the same 10$ value DFN  preferreds have. DFN pays out  55 cents , so 40 cents a share annually. That

[Commenting]

Not looking to be contentious, but I take it as a given the distributions paid out by split capital shares exceed the dividends collected from their underlying portfolios.  The assertion, all the split capital shares in general erode over time, since, as proof, the shares were issued at $15.00, but their NAVs are now nowhere near those values, seems, at least to a degree, questionable

[mouserman]

You are quite confused it seems, the common shares originally were issued at 15 $ and the preferred at 10$,, so the UNIT NAV back then was 25$. Commons are now worth under 5$...

[Commenting]

Nor quite confused, simply did not know.  True for all splits mentioned or just DFN?

[mouserman]

Yes and as far as FTN goes, they had to do a consolidation  in 2020 .. and the distribuiton got raised. Financial 15 Split Corp. Reorganization, Increased Preferred Dividends Toronto, Ontario – November 19, 2020 / GNW: Financial 15 Split Corp. (the “Company”) is pleased to announce a reorganization that will provide for increased asset coverage and increased

[Commenting]

So, on the basis of that haircut, the effective issued-NAV is, if I understand correctly, $17.88, not $15.00.  As of yesterday's close, you (Mm) had FTN's NAV at $17.91, a smidgen over this split's effective issued-NAV, though, it distributions safety margin was 58%.

[mouserman]

Yes the UNIT NAV is the combination of the value of holdings plus cash. The Preferred shares always carry a value of 10$ when figuring the UNIT NAV, even if they trade over or under that amount. Preferred shares get paid no matter where the unit nav is until the split fund goes under,  or  changes when it consolidates shares SO the remainder goes to the common shares, who take the risk

[AnEducator]

Hi Commenting, Just to make things clear, the units of both DFN and FTN were both issued for $25.00. Out this, $15.00 was allocated towards the capital shares and $10.00 was allocated towards the preferred shares. So with the current NAV being ~$14.75, the capital shares are only worth ~$4.75, well below the $15.00 issue price. As for FTN, they did a huge consolidation a few years ago as MM