Q: A comment rather than a question. What explains the 15% yield? Roughly a quarter of the payout for 2016 consists of a "capital gains dividend," rather than an eligible dividend. The portfolio itself produces dividends of which only a portion is used to cover the dividends of the preferred shares. The class A shares do not pay a dividend if the NAV of the total portfolio falls below $15, which happened in the recent past. However, over 2016 the Canadian and US financial holdings did very wel. The covered call options must have done very well also, but because of that the NAV seriously underperformed straightforward asset growth - compare FTN with ZEB and ZUB over the last year. So FTN's asset growth underperforms under bullish conditions. BTW, at the moment there seems to be a 30% premium on the NAV of FTN.
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Investment Q&A
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Q: How is it that Quadravest is able to keep generating a 15% annual return on this product. I know they use options to juice the dividend yield they get from the underlying companies. For 18 months from mid 2011 to end 2012 they did not pay a distribution on FTN so there is that risk. It just seems to me that this is one of those situations where it is to good to be true? Am I right to be wary of the product as I don't understand how they can maintain the high yield.
Thanks Kenn
Thanks Kenn
Q: Seasons Greetings! Can you tell me the next Earnings Date for FTN? Thank you!
Q: Merry Xmas to all ... if a fella was looking for a rather healthy dividend with minimal growth would you be worried about a small position in FTN. It just looks to good to be true. Am I missing something? TY.
Q: Can you please explain FTN to me and how can it afford such a high dividend ... have a great day.