TORONTO, Sept. 20, 2019 (GLOBE NEWSWIRE) -- (TSX: DGS, DGS.PR.A) As previously announced, the board of directors of Dividend Growth Split Corp. (the “Fund”) extended the maturity date of the class A and preferred shares of the Company for a period of up to five years beyond the current maturity date of November 28, 2019. The board of directors is pleased to announce that the new term of the Fund will be to September 27, 2024. In addition, the Fund announces that the distribution rate for the preferred shares (the “Preferred Shares”) for the new term from November 29, 2019 to September 27, 2024 has been increased to $0.55 per Preferred Share per annum (5.5% on the original issue price of $10) payable quarterly. The Preferred Share distribution rate is based on current market rates for preferred shares with similar terms.
The term extension offers preferred shareholders the opportunity to enjoy preferential cash dividends until September 27, 2024. Since inception in December 2007 to August 31, 2019, the Preferred Share has delivered a 5.4% (1) per annum return. In addition, the Fund intends to maintain the targeted monthly Class A Share distribution rate of at least $0.10 per Class A Share when the net asset value per unit (consisting of one Class A Share and one Preferred Share) is greater than $15.00, after taking into consideration the payment of the Class A Share distribution.
Since inception in December 2007 to August 31, 2019, the Class A share has delivered a 7.4% (1) per annum return, which outperformed the S&P/TSX Composite Index by 2.8% per annum. Since inception to August 31, 2019, Class A shareholders have received cash distributions of $12.89. 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.
In connection with the extension, shareholders who do not wish to continue their investment in the Fund, may retract their Preferred Shares and Class A Shares on November 28, 2019 pursuant to a special retraction right and receive a retraction price that is calculated in the same way that such price would be calculated if the Fund were to terminate on November 28, 2019. Pursuant to this option, the retraction price may be less than the market price if the security is trading at a premium to net asset value. Notice must be provided to your investment dealer by October 31, 2019 at 5:00 p.m. (Toronto time) in order to exercise this right; however, investment dealers may have earlier deadlines. Alternatively, shareholders may sell their shares through their securities dealer for the market price at any time, potentially at a higher price than would be achieved through retraction, or shareholders may take no action and continue to hold their shares.
About Brompton Funds
Brompton Funds, a division of Brompton Group which was founded in 2000, is an experienced investment fund manager with over $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 info@bromptongroup.com or visit our website at www.bromptongroup.com .
| (1) Annual Compound Returns | 1-Year | 3-Year | 5-Year | 10-Year | Since Inception (2) | |||||
| Dividend Growth Split Corp. – Class A | 7.3% | 9.8% | 4.7% | 13.0% | 7.4% | |||||
| S&P/TSX Composite Index | 4.3% | 7.2% | 4.1% | 7.3% | 4.6% | |||||
| Dividend Growth Split Corp. – Preferred | 5.4% | 5.4% | 5.4% | 5.4% | 5.4% | |||||
| S&P/TSX Preferred Share Index | (13.5%) | 2.0% | (1.6%) | 1.6% | 1.7% |
(2) Period from December 3, 2007 (commencement of operations) to August 31, 2019.
Returns are for the periods ended August 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”). 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 a passively managed portfolio of companies that is rebalanced at least annually. It is therefore not expected the Company’s performance will mirror that of the Composite Index, which has a more diversified portfolio. The Composite Index is calculated without the deduction of management fees, fund expenses and trading commissions, whereas the performance of the Company’s performance 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 document 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.
