SPLIT Share Funds (Corporations) EXPLAINED From A-Z: Benefits & Dangers + My Personal Tips & Tricks

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0:00 INTRO
1:34 SPLIT Fund Structure
3:13 Preferred Shares
4:40 Class A Shares
8:00 $15 UNIT NAV Rule
11:13 Termination Dates
14:17 Management Fees
16:13 Split Fund EXAMPLES
35:13 My Opinion (Class A vs Prefs)
37:00 How to Assess SPLIT FUNDS (4 Factors)
41:50 SPLIT Fund Dangers!
48:30 My overall thoughts….
53:46 No LOVE for SPLIT Funds 🙁
55:31 HONEST OPINION
57:30 Please LIKE! – OUTRO

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Resources:

Brandon Beavis Investing on Split Share Funds:
https://www.youtube.com/watch?v=uCJMknvPz1U

Rob Lauzon explaining Split Funds on BNN:
https://www.bnnbloomberg.ca/investing/video/rob-lauzon-discusses-split-share-mutual-funds~1425807

Split Funds Article:
https://financialpost.com/investing/fp-explains-everything-you-need-to-know-about-investing-in-split-shares

Split Funds according to BROMPTON:
https://www.bromptongroup.com/wp-content/uploads/2018/11/splitshare_primer2019.pdf

Split Funds according to Quadravest:
https://www.quadravest.com/_files/ugd/78f11d_ad97ac350fe6489c8e15e31c87ce0735.pdf

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Comments

stockholm publishings says:

Guys, REMEMBER.
Splint funds are long term holds, not short term.
You have to focus on the re-invested dividend that creates a higher dividend payout throughout the years.
Just look at the dividend payout in 10-20 years.
Now we're talking.

stockholm publishings says:

I totally agree about the NAV acting as a fail safe.
People are talking so much about how it is negative, they really should develop their reasoning.

Tim JP Collins says:

Brilliant Info, appreciate it!

Pao B says:

Also wondering if you''re able to make a video about paying your taxing, specifically for your circumstances (Retired early and living off dividends). Like how would that work exactly, because I'm currently reading on some taxes in Canada and from what i assume, we have some good dividend tax credits. How would ROC, capital gains, and dividends work? I'm specifically interested in ROC, since there isn't much info on it. I could be totally wrong about this but as an example: if a split share fund is paying a dividend/distribution ($0.1) that is 60% ROC and 40% dividend, would you put and only pay your taxes for the dividend, eg. you're only paying for $0.04 per distribution? Any information and/or video made ;)) is greatly appreciated!

ricardo pereira says:

Useful information. Thank you Adrian!

1JJONES says:

A lot of work went into this, congrats!

Kun Huo says:

Usually the most hated stocks on the market will offer superior returns. That said I am not that bullish on bank and insurance companies so dgs and Rs and be a nice combo.

Eric Dagenais says:

Thank you for all your good videos . Merci beaucoup!

Rouzbeh Mehr says:

if the NAV drops by 50%, A shares will be worthless right? example is Brompton Oil Split Corp which is at zero NAV

Rudy Katwaroo says:

I really appreciate your work you put into your channel. I started getting into investing independently in Apr of this year. It's been a fun ride and learning lots from you and other Canadian channels focused on info valued for beginners like me.

yomi001 says:

Excellent video! I really appreciate all the details and explanations. I also like that you gave two examples of failed split corps. Thanks!

Girish_k kumar says:

How about split share funds in usa

Pao B says:

So much good info! Instant like!

eseskay99 says:

Adriano, thank you for another gem of a video. Respect to you. I have an idea for another video for you if you are interested. Could you show us how to calculate / estimate the NAV of a split fund. Not the Unit Nav but the day to day NAV. Thank you for your consideration.

Yu Ma says:

Between you and Investing Academy, I choose you Adrian, I learned a lot and made a lot of money from your style of investing.

Mark says:

I see at the end you discussed what we talked about…important for people to hear. Our differences in investing strategy are rooted simply in our monthly expenses. I don't know how you keep your expenses so low. Mine are probably 3-4 times yours. Different strokes for different folks I guess.

Ruminations from the Trailer Park says:

Hi Adrian, thanks again for the video, question for you is here such an animal as a USD denominated Canadian listed split share etf? The reason being I want to generate USD while not having it treated as all foreign income (it will be held in my USD margin account)

ddivadius says:

Do you know if the more diversified split share funds like GDV, DFN or RS would change the stocks they invest in over time or do they need to basically stick with what they started with?

Kirsten Sunesen says:

Did I hear and understand correctly that split share class A’s are tax advantageous because a portion of the dividends could be ‘return of capital’? Hopefully WealthSimple gets that paperwork right for me lol.

Parrot Trader says:

Thank you for all your insight and teachings on splitshare funds. My invest portfolio has done very well since adding splitshare funds to my portfolio. Thank you!!👍

Mehroz Ahmed says:

For my Canadian investors, a lot of split Corp etf are not available on Wealth Simple, for example YCF (commerce bank) be very careful.

Richard Malkiel says:

The best work Adrian and Erica that is why I like your channel. Happy to be part of your channel. All the best. Super like this video.

Vic Gill says:

Such detailed explanation with examples. Thank you Adrian!!

Nav Reet says:

Amazing video ….. thank you so much!

TOMOFONO says:

This is awesome. Thanks!

c says:

Would "Overnight Right Offering" be considered as sudden price drop for Class A share here? I meant it does provide investor lower entry point and higher dividend yield but it also drag the price closer to the Unit Nav price, take FN for example. Maybe another video to cover the overnight offering some other time?

moresugar tradercc says:

appreciate the work you did on this video well done also Brandon dad explained split funds very well

Robert Taylor says:

Return on capital: is that the fund selling assets to cover the dividend? Or just a different way to give out money?

MORE POWERRRRR BABY!!!! says:

Great video! Question: Let’s say I am about to make a large deposit into my dividend portfolio. What’s you opinion on putting the lump sum into a high yielding split share fund (ex: DFN, FFN, or DGS) and taking the monthly passive income to purchase safer Blue Chips? Thank you!

J D says:

Did you buy clm at 13?

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