TORONTO, Nov. 19, 2019 (GLOBE NEWSWIRE) -- (TSX: DGS, DGS.PR.A) Dividend Growth Split Corp. (the “Fund”) announces a pro-rata redemption of preferred shares (the “Preferred Shares”) to maintain an equal number of class A shares (the “Class A Shares”) and Preferred Shares outstanding. In connection with the extension of the Fund’s term for an additional five years, holders of both Class A Shares and Preferred Shares had a special retraction right. Class A shareholders retracted 1,189,759 more shares than Preferred shareholders. As a result, the Fund is required to redeem 1,189,759 Preferred Shares on a pro-rata basis pursuant to the Fund’s constating documents. This is the first pro-rata redemption the Fund has had to effect since inception in December 2007. Each Preferred shareholder of record on November 28, 2019 will receive a redemption price of $10.13 per Preferred Share resulting in a reduction of 3.508% of each Preferred shareholders’ holdings. The redemption payment will be made on or before December 13, 2019.
Since inception in December 2007 to October 31, 2019, the Preferred Share has delivered a 5.4%(1) per annum return.
Since inception in December 2007 to October 31, 2019, the Class A share has delivered a 7.6%(1) per annum return, which outperformed the S&P/TSX Composite Index by 3.0% per annum. Since inception to October 31, 2019, Class A shareholders have received cash distributions of $13.09. Class A shareholders also have the option to reinvest their cash distributions in a dividend reinvestment plan which is commission free to participants. Class A shareholders can enroll in the DRIP program by contacting their investment advisor.
The Fund invests, on an approximately equally-weighted basis, in a portfolio consisting primarily of equity securities of Canadian dividend growth companies. In addition, DGS may hold up to 20% of the total assets of the portfolio in global dividend growth companies for diversification and enhanced return potential.
About Brompton Funds
Founded in 2000, Brompton is an experienced investment fund manager with approximately $2 billion in assets under management. Brompton’s investment solutions include TSX closed-end funds and exchange-traded funds. For further information, please contact your investment advisor, call Brompton’s investor relations line at 416-642-6000 (toll-free at 1-866-642-6001), email firstname.lastname@example.org or visit our website at www.bromptongroup.com.
Annual Compound Returns
|Dividend Growth Split Corp. – Class A||62.2%||41.8%||8.8%||6.9%||14.4%||7.6%|
|S&P/TSX Composite Index||18.0%||13.2%||6.8%||5.6%||7.3%||4.6%|
|Dividend Growth Split Corp. – Preferred||4.5%||5.4%||5.4%||5.4%||5.4%||5.4%|
|S&P/TSX Preferred Share Index||(0.2%)||(7.7%)||2.4%||(0.9%)||2.2%||2.0%|
(2) Period from December 3, 2007 (commencement of operations) to October 31, 2019.
Returns are for the periods ended October 31, 2019. The table shows the Fund’s compound return on a Class A share and Preferred share for each period indicated, compared with the S&P/TSX Composite Index (‘‘Composite Index’’) and the S&P Preferred Share Index (“Preferred Index”) (together the (“Indices”). The Composite Index tracks the performance of a broad index of large-capitalization issuers listed on the Toronto Stock Exchange. The Preferred Index is comprised of preferred shares listed and trading on the Toronto Stock Exchange that meet criteria relating to size, liquidity and issuer rating. The Fund invests in an actively managed portfolio of companies that is rebalanced at least annually. It is therefore not expected the Fund’s performance will mirror that of the Indices, which have more diversified portfolios. The Indices are calculated without the deduction of management fees, fund expenses and trading commissions, whereas the performance of the Fund is calculated after deducting such fees and expenses. Further, the performance of the Fund’s Class A shares is impacted by the leverage provided by the Fund’s Preferred shares.
You will usually pay brokerage fees to your dealer if you purchase or sell shares of the investment funds on the Toronto Stock Exchange or other alternative Canadian trading system (an “exchange”). If the shares are purchased or sold on an exchange, investors may pay more than the current net asset value when buying shares of the investment fund and may receive less than the current net asset value when selling them.
There are ongoing fees and expenses associated with owning shares of an investment fund. An investment fund must prepare disclosure documents that contain key information about the fund. You can find more detailed information about the Fund in the public filings available at www.sedar.com. The indicated rates of return are the historical annual compounded total returns including changes in share value and reinvestment of all distributions and do not take into account certain fees such as redemption costs or income taxes payable by any securityholder that would have reduced returns. Investment funds are not guaranteed, their values change frequently, and past performance may not be repeated.
Certain statements contained in this document constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking information may relate to matters disclosed in this news release and to other matters identified in public filings relating to the Fund, to the future outlook of the Fund and anticipated events or results and may include statements regarding the future financial performance of the Fund. In some cases, forward-looking information can be identified by terms such as “may”, “will”, “should”, “expect”, “plan”, “anticipate”, “believe”, “intend”, “estimate”, “predict”, “potential”, “continue” or other similar expressions concerning matters that are not historical facts. Actual results may vary from such forward-looking information. Investors should not place undue reliance on forward-looking statements. These forward-looking statements are made as of the date hereof and we assume no obligation to update or revise them to reflect new events or circumstances.