TORONTO, Sept. 28, 2018 — (TSX: DGS, DGS.PR.A) As a result of strong long-term performance, Dividend Growth Split Corp. (the “Fund”) is pleased to announce that the board of directors has approved an extension of the maturity date of the Class A and Preferred shares of the Company. The current maturity date of November 28, 2019 will be extended for an additional period of three to five years. The new term and the proposed rate for the preferred share dividend for the new term will be announced at least 60 days prior to the current November 28, 2019 maturity date. The preferred share dividend rate for the extended term will be based on market yields for preferred shares with similar terms at that time.
The extension of the term of the Fund is not expected to be a taxable event and should enable shareholders to defer potential capital gains tax liability that would have otherwise been realized on the redemption of the Class A shares or Preferred Shares at the end of the term until such time as such shares are disposed of by shareholders.
Since inception in December 2007 to August 31, 2018, the Class A share has delivered a 7.4%(1) per annum return, which outperformed the S&P/TSX Composite Index by 2.7% per annum. Since inception to August 31, 2018, Class A shareholders have received cash distributions of $12.39. 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 term extension offers Preferred shareholders the opportunity to enjoy preferential cash dividends until the end of the extended term. Since inception to August 31, 2018, the Preferred share has delivered a 5.4% (1) per annum return.
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 potentially enhanced return potential.
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 traded funds, mutual funds, and flow-through limited partnerships. 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 [email protected] or visit our website at www.bromptongroup.com.
|Annual Compound Returns||1-Year||3-Year||5-Year||10-Year||Since Inception|
|Dividend Growth Split Corp. – Class A||(3.2)%||12.1%||10.8%||10.0%||7.4%|
|Dividend Growth Split Corp. – Preferred||5.4%||5.4%||5.4%||5.4%||5.4%|
|S&P/TSX Composite Index||10.1%||8.7%||8.3%||4.7%||4.7%|
Returns are for the periods ended August 31, 2018. 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’’). The Composite Index tracks the performance of a broad index of large-capitalization issuers listed on the TSX. The Fund invests in a passively managed portfolio of 20 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.