Top 10 Canadian Financial Trust

Quick Facts+

Inception Date: 02-23-2000

Management Fee: 1.1%

Service Fee: 0.3%

Fund Overview

Overview

The Fund is a closed-end investment trust designed to provide unitholders with exposure to the six largest Canadian banks and four largest Canadian life insurance companies and utilizes Strathbridge’s proprietary SSO covered call writing strategy to enhance the income generated by the portfolio and to reduce volatility.

 

Objectives

The Fund’s investment objectives are:

  • to provide Unitholders of the Fund with a stable stream of quarterly cash distributions in an amount targeted to be 7.5% per annum on the NAV of the Fund; and
  • to return the NAV per Unit as of August 2, 2005 (on a post-consolidated basis) of $15.60 to Unitholders upon termination of the Fund.

 

Name Ticker Current Yield Recent
Distributions
Most Recent
Distribution Date
Distributions
Since Inception
Top 10 Canadian Financial Trust TCT.UN 8.37% $0.14 2020-09-30 $12.51

Top Holdings Top 10 Holdings as of June 30, 2020

Holding Name % of Fund
National Bank of Canada 12.0%
Canadian Imperial Bank of Commerce 11.8%
Cash and Short-Term Investments 11.8%
Sun Life Financial Inc. 10.0%
The Toronto-Dominion Bank 9.4%
iA Financial Corporation Inc. 8.9%
Manulife Financial Corporation 8.1%
The Bank of Nova Scotia 7.4%
Great-West Lifeco Inc. 7.4%
Bank of Montreal 6.6%
Sector Allocations

Historic Net Asset Value Per Unit

The Fund calculates the net asset value per share on a weekly basis as of the close of business on Thursday and generally posts the amount at the close of business on Friday. If the last day of a month falls during the week on a day other than Thursday, the NAVs per share are calculated as of the last day of the month for that week and the regular weekly calculation on Thursdays is resumed the following week.

 

Note:

Prior to August 2, 2005 this fund operated as Mulvihill Digital World Trust - DWT.UN. See press release of August 2, 2005 for more information.

 

Date:   Basic NAV Per
Capital Unit
Diluted NAV
Per Capital Unit
2020-09-17    $7.09  N/A 
2020-09-10    $7.23  N/A 
2020-08-31    $7.34  N/A 
2020-08-27    $7.51  N/A 
2020-08-20    $7.17  N/A 
2020-08-13    $7.27  N/A 
2020-08-06    $7.01  N/A 
2020-07-31    $6.83  N/A 
2020-07-23    $6.90  N/A 
2020-07-16    $6.93  N/A 
2020-07-09    $6.62  N/A 
2020-06-30    $6.76  N/A 
2020-06-25    $6.79  N/A 
2020-06-18    $6.91  N/A 
2020-06-11    $6.86  N/A 
2020-06-04    $7.13  N/A 
2020-05-29    $6.78  N/A 
2020-05-21    $6.47  N/A 
2020-05-14    $6.31  N/A 
2020-05-07    $6.53  N/A 
2020-04-30    $6.73  N/A 
2020-04-23    $6.33  N/A 
2020-04-16    $6.34  N/A 
2020-04-09    $6.91  N/A 
2020-03-31    $6.74  N/A 
2020-03-26    $6.66  N/A 
2020-03-19    $5.92  N/A 
2020-03-12    $6.12  N/A 
2020-03-05    $8.54  N/A 
2020-02-28    $8.72  N/A 
2020-02-20    $9.53  N/A 
2020-02-13    $9.56  N/A 
2020-02-06    $9.63  N/A 
2020-01-31    $9.41  N/A 
2020-01-23    $9.58  N/A 
2020-01-16    $9.51  N/A 
2020-01-09    $9.42  N/A 

Distributions & Tax

Distributions are calculated and paid each calendar quarter based on 7.5% per annum of the net asset value of the Fund and are generally classified as a return of capital for tax purposes.

 

Most Recent Distributions

Name Ticker Current Yield* Recent
Distributions
Most Recent
Distribution Date
Distributions
Since Inception
Top 10 Canadian Financial Trust TCT.UN 8.37% $0.14 2020-09-30 $12.51

 

Tax Benefits

Distributions from the Fund may have significant tax benefits which result in higher after-tax cash flow than if the income had been earned outside of the Fund. The Fund will generally earn dividends on portfolio securities, interest income on cash balances and option premium income which is generally taxed as capital gains. Based on existing tax pools the Fund expects that a significant portion of the distributions will be a return of capital for tax purposes. Any portion of a distribution that is considered a return of capital for tax purposes is not included in an investor’s taxable income for a year, but will reduce the adjusted cost base of the units, by the amount received. The reduction in the adjusted cost base of the units is ultimately taxed as a capital gain when the units are sold for investors who hold their units as capital property.

The actual breakdown of distributions for tax purposes will be provided to unitholders annually in March following receipt of the information from the Fund's custodian. This information will also be posted on the website as soon as it is available.

This information is of a general nature only and does not constitute legal or tax advice to any particular investor. Accordingly, prospective investors are advised to consult their own tax advisors with respect to their individual circumstances.

 

Note:

Prior to August 2, 2005 this fund operated as Mulvihill Digital World Trust - DWT.UN. See press release of August 2, 2005 for more information.

 

Tax and Distribution Summary Year Selection:  

 

  Regular Distribution Special Distribution Total Distribution Capital Gains
per Unit
Div. Income per Unit Return of Capital Other Income Foreign Dividend Income Witholding Taxes Paid
September 2020 0.137630 0.000000 0.137630 0.000000 0.000000 0.000000 0.000000 0.000000 0.000000
June 2020 0.127130 0.000000 0.127130 0.000000 0.000000 0.000000 0.000000 0.000000 0.000000
March 2020 0.163500 0.000000 0.163500 0.000000 0.000000 0.000000 0.000000 0.000000 0.000000
Total for 2020     $0.428260 $0.000000 $0.000000 $0.000000 $0.000000 $0.000000 $0.000000
Percent (%)       0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
Total Distributions
to Date
    $17.306140            

 

Portfolio Manager Updates

 

PM Updates - June 2020

As of June 30, 2020, the Net Asset Value (NAV) of TCT.UN increased to $ 6.76 from the March 31, 2019 value of $ 6.74. Unitholders received a distribution of $ 0.12713 during the quarter in accordance with the distribution policy of 7.5 % per annum of the NAV per unit. The unit’s last trading price on June 30th was $6.32. This represents a discount of 6.5 % to its underlying NAV.

The S&P TSX Composite had a total return of 17.0 % during the quarter closing at 15,515 on June 30th. Canadian Financials underperformed the broader Canadian market as the Financial companies posted a total return of 6.2 % over the same period. The return on an equal weighted basket of the ten portfolio stocks was 6.09 %. The total fund return was 2.2 %.

The Life Insurance stocks outperformed the Bank stocks total return over the past quarter with a return of 7.5 % versus 4.9 % for the banks. The National Bank of Canada was the top performer with a return of 14.4 %. The Bank of Nova Scotia trailed the pack with a return of – 0.7 %

At the end of June, the indicated dividend yield on the stocks in the fund averaged 5.5 % (equal weight) right in line with both bank holdings and the insurance holdings. The one-year earnings per share growth rate from calendar Q2 2019 to Q2 2020 was 7.5 % on average for all the holdings.

The 30-day historical volatility in the Financial companies started the quarter at around the 100 % level, falling to just over 30 %, towards the end. This is extreme by any measure. The trend, however, is encouraging in the era of COVID 19. The fund had an average cash position of 8.8 % over the quarter. Notional Short Call positions averaged 17.1 %, getting as high as 32.7 %. The fund also purchased Long Call positions with premiums that reached a high of 0.5 % of the fund and averaged 0.2 % of the fund over the quarter. Notional Short Put (cash covered) averaged 2.5 % with a high of 6.1 %.

PM Updates - March 2020

As of March 31, 2020, the Net Asset Value (NAV) of TCT.UN decreased to $ 6.74 from the December 31, 2019 value of $ 9.28. Unitholders received a distribution of $ 0.1635 during the quarter in accordance with the distribution policy of 7.5 % per annum of the NAV per unit. The unit’s last trading price on March 31st was $6.32. This represents a discount of 6.2 % to its underlying NAV.

The S&P TSX Composite had a total return of – 20.9 % during the quarter closing at 13,379 on March 31st. Canadian Financials underperformed the broader Canadian market as the S&P/TSX Capped Financials Index (SPTSFN) posted a total return of - 21.1 % over the same period. The return on an equal weighted basket of the ten portfolio stocks was – 24.6 %. The total fund return was – 25.6 %.

The S&P/TSX Life and Health Insurance Index underperformed the S&P/TSX Diversified Bank Index Total Return Index over the past quarter with a return of - 29.1 % versus - 19.6 % for the banks. Royal Bank of Canada was the top performer with a return of – 14.3 %. iA Financial trailed the pack with a return of – 37.5 %

At the end of December, the indicated dividend yield on the stocks in the fund averaged 5.6 % (equal weight). Bank holdings and the insurance holdings both averaged 5.8 % and 5.7 % respectively. The one-year dividend growth rate from calendar Q1 2019 to Q1 2020 was 8.5 % on average for all the holdings.

The 30-day historical volatility in the S&P/TSX Capped Financials Index (SPTSFN) started the quarter at around the 5.7 % level, climbing as high as 100.0 %, at the end. The COVID 19 situation created two very different volatility paradigms from the beginning to the end of the quarter. The fund had an average cash position of 3.4% over the quarter. Notional short call positions reached a high of 41.2 % averaging 17.4.

PM Updates - December 2019

As of December 31, 2019, the Net Asset Value (NAV) of TCT.UN increased to $ 9.28 from the September 30, 2019 value of $ 9.16. Unitholders received a distribution of $ 0.17925 during the quarter in accordance with the distribution policy of 7.5 % per annum of the NAV per unit. The unit’s last trading price on December 27th was $9.21. This represents a discount of 0.8 % to its underlying NAV.

The S&P TSX Composite had a total return of 3.2 % during the quarter closing at 17,063 on December 31st. Canadian Financials underperformed the broader Canadian market as the S&P/TSX Capped Financials Index posted a total return of 1.0 % over the same period. The return on an equal weighted basket of the ten portfolio stocks was 3.8%. The total fund return was 3.2 %.

The S&P/TSX Life and Health Insurance Index outperformed the S&P/TSX Diversified Bank Index Total Return Index over the past quarter with a return of 7.6 % versus negative 1.8 % for the banks. I.A. Financial was the top performer with a return of 19.1%. TD Bank trailed the pack with a return of minus 4.8 %

At the end of December, the indicated dividend yield on the stocks in the fund averaged 4.2 % (equal weight). Bank holdings and the insurance holdings both averaged 4.4 % and 3.8 % respectively. The one-year dividend growth rate from calendar Q4 2018 to Q4 2019 was 8.3 % on average for all the holdings.

The 30 day historical volatility in the S&P/TSX Capped Financials Index (SPTSFN) started the quarter at around the 8.0 % level, quickly climbing as high as 11.4 %, and then ending the quarter at levels just in excess of 6.0 %. The fund had an average cash position of 3.0% over the quarter. Notional short call positions reached a high of 8.6 % averaging 4.9 %. Notional long put positions reached a high of 10.6 % averaging 4.4 %.

PM Updates - September 2019

As of September 30, 2019, the NAV (“NAV”) of TCT.UN increased to $ 9.16 from the June 28, 2019 value of $ 8.89. Unitholders received a distribution of $ 0.16331 during the quarter in accordance with the distribution policy of 7.5 % per annum of the NAV per unit. The unit’s last trading price on September 30th was $8.87. This represents a discount of 3.2 % to its underlying NAV.

The S&P TSX Composite had a total return of 2.5 % during the quarter closing at 16,659 on September 30th. Canadian Financials outperformed the broader Canadian market as the S&P/TSX Capped Financials Index posted a total return of 5.2 % over the same period. The return on an equal weighted basket of the ten portfolio stocks was 6.3%. The total fund return was 4.9 %.

The S&P/TSX Life and Health Insurance Index outperformed the S&P/TSX Diversified Bank Index Total Return Index over the past quarter with a return of 6.8% versus 4.3 % for the banks. I.A. Financial was the top performer with a return of 14.0%. Bank of Montreal trailed the pack with a return of minus -0.3%.

At the end of September, the indicated dividend yield on the stocks in the fund averaged 4.2 % (equal weight). Bank holdings and the insurance holdings both averaged 4.4 % and 4.0 % respectively. The one-year dividend growth rates from calendar Q3 2018 to Q3 2019 were 9.2 % on average for all the holdings.

The 30 day historical volatility in the S&P/TSX Capped Financials Index (SPTSFN) started the quarter at around the 10 % level and ended the quarter at around the 10% level. While the low was 5.4% and the high was 13.9 (a range of 8.5 percentage points) the volatility was characterized by an absence of erratic changes through from start to finish. The fund had an average cash position of 3.6% over the quarter while the notional short call positions ranged from zero to 23.8 %, averaging 9.6%.

PM Updates - September 2019

As of September 30, 2019, the NAV of TXT.PR.A was $12.50. A quarterly distribution of $0.19531 was declared and paid to Preferred Security unit holders of record September 13, 2019 representing a yield of 6.25% based on the original issue price of $12.50.

The September 30, 2019 NAV of TXT.UN was $3.47, up from $2.95 June 28th, 2019. A quarterly distribution of $0.04706 was declared and paid to Capital unit holders of record as at September 13, 2019 in accordance with the distribution policy of 7.5% per annum of the NAV of the capital unit.

The capital unit’s last trading price on September 30th was $3.08. This represents an 11.2% discount to its underlying NAV. The preferred share last price for the quarter on September 26th was $12.40 representing a 0.8% discount to NAV. The combined unit, capital and preferred shares, closed the quarter at a 3.1 % discount to NAV.

The S&P TSX Composite had a total return of 2.5 % during the quarter closing at 16,659 on September 30th. Canadian Financials outperformed the broader Canadian market as the S&P/TSX Capped Financials Index posted a total return of 5.2 % over the same period. The return on an equal weighted basket of the ten portfolio stocks was 6.3%. The total fund return was 4.9 %.

The S&P/TSX Life and Health Insurance Index outperformed the S&P/TSX Diversified Bank Index Total Return Index over the past quarter with a return of 6.8% versus 4.3 % for the banks. I.A. Financial was the top performer with a return of 14.0%. Bank of Montreal trailed the pack with a return of minus -0.3%

At the end of September, the indicated dividend yield on the stocks in the fund averaged 4.2 % (equal weight). Bank holdings and the insurance holdings both averaged 4.4 % and 4.0 % respectively. The one-year dividend growth rates from calendar Q3 2018 to Q3 2019 were 9.2 % on average for all the holdings.

The 30 day historical volatility in the S&P/TSX Capped Financials Index (SPTSFN) started the quarter at around the 9 % level climbing as high as 10.6 % end the end of June before settling in at 10 % to close the quarter. The fund had an average cash position of 3.8 % over the quarter while the notional short call positions ranged from zero to 23.6 %, averaging 9.6 %.

PM Updates - June 2019

As of June 28, 2019, the NAV (“NAV”) of TCT.UN increased to $8.89 from the March 31, 2019 value of $8.88. Unitholders received a distribution of $0.1665 during the quarter in accordance with the distribution policy of 7.5% per annum of the NAV per unit. The unit’s last trading price on June 28th was $8.43. This represents a discount of 5.2% to its underlying NAV.

The S&P TSX Composite had a total return of 2.6% during the quarter closing at 16,382 on June 28th. Canadian Financials outperformed the broader Canadian market as the S&P/TSX Capped Financials Index posted a total return of 3.5% over the same period. The return on an equal weighted basket of the ten portfolio stocks was 3.1%. The total fund return was 2.2%.

The S&P/TSX Life and Health Insurance Index outperformed the S&P/TSX Diversified Bank Index Total Return Index marginally over the past quarter with a return of 3.6% versus 3.4% for the banks. The insurers prevailed with the I.A. Financial topping the returns at 9.2%. Great West lagged with a return of minus 5.6%

At the end of June, the indicated dividend yield on the stocks in the fund averaged 4.4% (equal weight). Bank holdings and the insurance holdings both averaged 4.5% and 4.3% respectively. The one-year dividend growth rates from calendar Q1 2018 to Q1 2019 were 9.0% on average for the holdings.

The 30-day historical volatility in the S&P/TSX Capped Financials Index (SPTSFN) started the quarter at around the 9% level climbing as high as 10.6% end the end of June before settling in at 10% to close the quarter. The fund had an average cash position of 11.2%. Notional Short Call Positions ranged from 9.2% to 23.7%, averaging 17.1% over the quarter. Notional Short Put (cash covered) positions ranged from zero to 2.2% averaging 0.4% over the quarter. Long puts ranged from zero to 10.6% averaging 3.9%.

PM Updates - March 2019

As of March 29, 2019, the NAV “NAV” of TCT.UN increased to $ 8.88 from the December 31, 2018 value of $ 8.32. Unitholders received a distribution of $ 0.17213 during the quarter in accordance with the distribution policy of 7.5 percent per annum of the NAV per unit. The unit’s last trading price on March 29th was $8.66. This represents a discount of 2.5 percent to its underlying NAV.

The S&P TSX Composite had a total return of 13.3 percent during the quarter closing at 16,102 on March 29th. Canadian Financials underperformed the broader Canadian market as the S&P/TSX Capped Financials Index posted a total return of 10.4 percent over the same period. The return on an equal weighted basket of the ten portfolio stocks was 11.2 percent. The total fund return was 8.8 percent.

The S&P/TSX Life and Health Insurance Index outperformed the S&P/TSX Diversified Bank Index Total Return Index over the past quarter handily with a return of 18.0 percent versus 8.0 percent for the banks. The insurers prevailed with the Manulife Financial Corp topping the returns at 18.0 percent. The Bank of Nova Scotia lagged with a return of 4.5 percent.

At the end of March, the indicated dividend yield on the stocks in the fund averaged 4.3 percent (equal weight). Bank holdings and the insurance holdings both averaged 4.4 percent and 4.2 percent respectively. The one-year dividend growth rates from calendar Q1 2018 to Q1 2019 were 7.3 percent on average for the holdings.

The 30 day historical volatility in the S&P/TSX Capped Financials Index (SPTSFN) started the quarter at around the 16 percent to 17 percent level steadily declining to the 7 to 8 percent area. The fund had an average cash position of 5.3 percent over the quarter. Cash covered short put positions started the quarter with a notional value of 3.2 percent. This position was increased to 6.8 percent. All the cash covered puts were closed before the end of March. Average covered call writing increased from 11.3 percent to 15.2 percent as compared to the fourth quarter. The overwritten position reached a high of 29.0 percent. The Fund ended the quarter with 23 percent of the portfolio subject to calls.

PM Updates - December 2018

As of December 31, 2018, the NAV (“NAV”) of TCT.UN decreased to $8.32 from the September 30, 2018 value of $9.57. Unitholders received a distribution of $0.16969 during the quarter in accordance with the distribution policy of 7.5% per annum of the NAV per unit. The unit’s last trading price on December 31st was $8.34. This represents a premium of 0.2% to its underlying NAV.

The S&P TSX Composite had a total return of -10.1% during the quarter closing at 14,323 on December 31st. Canadian Financials underperformed the broader Canadian market as the S&P/TSX Capped Financials Index posted a total return of -11.2% over the same period. The return on an equal weighted basket of the ten portfolio stocks was -12.3%. The total fund return was -11.3%.

The S&P/TSX Life and Health Insurance Index underperformed the S&P/TSX Diversified Bank Index Total Return Index over the past quarter with a return of -12.8% versus -11.6% for the banks. The Royal Bank of Canada was the performance leader with a return of -8.8%. The laggard was the Bank of Montreal with a return of -15.5%

At the end of December, the indicated dividend yield on the stocks in the fund averaged 4.6% (equal weight). Bank holdings and the insurance holdings both averaged 4.6% and 4.7% respectively. The one-year dividend growth rates from calendar Q4 2017 to Q4 2018 were 8.26% on average for the holdings.

The 30-day historical volatility in the S&P/TSX Capped Financials ETF started the quarter at a low of just 5.9%, stabilizing around 10% to 14% for most of the quarter before hitting a high of about 16.2% at year end. The fund had an average cash position of 8.0% over the quarter. Average covered call writing strategies increased from 5.2% to 11.3% as compared to the third quarter. The overwritten position reached a high of 36.0%. The Fund ended 2018 with 13.4 percent of the portfolio subject to calls, 3.2 percent of the portfolio subject to short puts.

PM Updates - September 2018

As of September 28, 2018, the Net Asset Value (“NAV”) of TCT.UN increased to $ 9.57 from the June 29, 2018 value of 9.54. Unitholders received a distribution of $ 0.18469 during the quarter in accordance with the distribution policy of 7.5% per annum of the NAV per unit. The unit’s last trading price on September 28th was $9.45. This represents a discount of 1.3% to its underlying NAV.

The S&P TSX Composite had a total return of -0.6% during the quarter closing at 16,073 on September 28th. Canadian Financials outperformed the broader Canadian market as the S&P/TSX Capped Financials Index posted a total return of 3.8% over the same period. The return on an equal weighted basket of the ten portfolio stocks was 2.7%. The total fund return was 2.3%.

The S&P/TSX Life and Health Insurance Index underperformed the S&P/TSX Diversified Bank Index Total Return Index over the past quarter with a return of -1.6% versus 4.8%. The standout performer in the portfolio was the Canadian Imperial Bank of Commerce on the upside with a return of 7.0%. The laggard was Sun Life Financial with a return of -1.9%

At the end of June, the indicated dividend yield on the stocks in the fund averaged 3.9% (equal weight). Bank holdings and the insurance holdings both averaged 3.9%. The one-year dividend growth rates from calendar Q3 2017 to Q3 2018 were 8.0% on average for the holdings.

The 30 Day historical volatility in the S&P/TSX Capped Financials ETF started the quarter at a high of just over 8.7%, stabilizing around 7% before hitting a low of about 5.2% mid-July. The historical volatility finished the quarter at around 6%. The fund had an average cash position of 5.3% over the quarter. Average covered call writing strategies decreased from 6.9% to 5.2% as compared to the second quarter. The overwritten position reached a high of 11.5%. The fund held long call positions at the start of the period representing about 0.2% of the fund’s market value. These positions were sold to close mid-August.

PM Updates - June 2018

As of June 30, 2018, the NAV (“NAV”) of TCT.UN decreased to $ 9.54 from the March 31, 2018 value of 9.68. Unitholders received a distribution of $ 0.18375 during the quarter in accordance with the distribution policy of 7.5 % per annum of the NAV per unit. The unit’s last trading price on June 29th was $9.35. This represents a discount of 2.0 % to its underlying NAV.

The S&P TSX Composite had a total return of 6.8 % during the quarter closing at 16,278 on June 29th. Canadian Financials underperformed the broader Canadian market as the S&P/TSX Capped Financials Index posted a total return of 2.1 % over the same period. The return on an equal weighted basket of the ten portfolio stocks was 1.0 %. The total fund return was 0.4 %.

The S&P/TSX Life and Health Insurance Index underperformed the S&P/TSX Diversified Bank Index Total Return Index over the past quarter with a return of -0.2 % versus 1.7 %. The standout performer in the portfolio was the Bank of Montreal on the upside with a return of 5.4 %. The laggard was the Bank of Nova Scotia with a return of -4.1 %

At the end of June, the indicated dividend yield on the stocks in the fund averaged 2.7 % (equal weight). Bank holdings averaged 3.6 % and the insurance holdings averaged 1.5 %. The one year dividend growth rates from Q2 2017 to Q2 2018 were 7.2 % on average for the holdings.

The 30 Day historical volatility in the S&P/TSX Capped Financials ETF (XFN) started the quarter at a high of just over 14 %. Shortly thereafter the volatility levels stabilized ranging from 9 % to 10 %. The fund had an average cash position of 6.0 % over the quarter. Average covered call writing strategies decreased marginally from 7.6 % to 7.1 % as compared to the first quarter. The overwritten position reached a high of 22.1 %. The fund engaged in the purchase of some long call positions throughout the month of June. The cost of premiums on these options was 0.16 percent of the value of the fund.

PM Updates - March 2018

As of March 31, 2018, the NAV (“NAV”) of TCT.UN decreased to $ 9.68 from the December 31, 2017 value of 10.30. Unitholders received a distribution of $0.19 during the quarter in accordance with the distribution policy of 7.5% per annum of the NAV per unit. The unit’s last trading price on March 29th was $9.99. This represents a premium of 3.2% to its underlying NAV.

The S&P TSX Composite had a total return of -4.5% during the quarter closing at 15,367 March 29th. Canadian Financials outperformed the broader Canadian market as the S&P/TSX Capped Financials Index posted a total return of -3.5% over the same period. The return on an equal weighted basket of the ten portfolio stocks was -3.7%. The total Fund return was -4.2%.

The S&P/TSX Life and Health Insurance Index underperformed the S&P/TSX Diversified Bank Index Total Return Index over the past quarter with a return of -4.9% versus -2.0%. The standout performer in the portfolio was Sun Life Financial on the upside with a return of 2.9% while Industrial Alliance lagged with a return of -10.8%

At the end of March, the indicated dividend yield on the stocks in the Fund averaged 3.8% (equal weight). Bank holdings averaged 4.0% and the insurance holdings averaged 3.7%. Dividend growth rates of first quarter (calendar) from last year were 7.4%

The 30 Day historical volatility in the S&P/TSX Capped Financials ETF (XFN) hit a low of 4.6% in January and reached a high of 12.4% in early March. The Fund had an average cash position of 3.6% over the quarter. Average covered call writing strategies increased to 7.3% from 3.1% in the first quarter. The overwritten position reached a high of 23.8%. The Fund engaged in the purchase of some long call positions throughout the month of January. The cost of premiums on these options reached 0.7 percent of the value of the Fund.

PM Updates - December 2017

As of December 29, 2017, the Net Asset Value (“NAV”) of TCT.UN increased to $10.30 from the September 29, 2017 value of 10.02. Unitholders received a distribution of $0.19631 during the quarter in accordance with the distribution policy of 7.5 % per annum of the NAV per unit. The unit’s last trading price on December 27, 2017 was $10.26. This represents a discount of 0.4 % to its underlying NAV.

The S&P TSX Composite returned 4.4 % including dividends over the quarter closing near it’s high at December 29th. Canadian Financials outperformed the broader Canadian market as the S&P/TSX Capped Financials Index posted a total return of 5.7 % over the quarter. The return on an equal weighted basket of the ten portfolio stocks was 5.8 %. The total fund return for the fourth quarter was 4.8 %.

The S&P/TSX Life and Health Insurance Index underperformed the S&P Diversified Bank Index Total Return Index over the past quarter with a return of 3.9 % versus 6.6 %. The standout performers in the portfolio were the Canadian Imperial Bank of Commerce on the upside with a return of 13.4% and Great West Lifeco on the downside with a return of -1.2%

Calendar fourth quarter annual dividend growth rates averaged 7.7 % for the portfolio holdings. The bank holdings annual dividend growth averaged 7.2 %, lagging the insurance companies 8.4 % increase. On a five-year basis, the average rate of dividend increases was 7.03 % for the portfolio holdings.

The 30 Day historical volatility in the S&P/TSX Capped Financials ETF (XFN) hit a low of 7.3 % in latter part of October reaching a high of 10.4 % early December. The fund had an average cash position of 3.8% over the quarter. Average covered call writing strategies decreased marginally to 3.1 % from 3.5 % in the third quarter. The overwritten position reached a high of 5.6 %. There were no put option transactions executed in the fund in the third quarter. The fund engaged in the purchase of some long call positions. Premiums on these options were as high as 0.5 percent of the market value of the fund. At year end the extent of our purchased call positions was reduced slightly to take some profits. The outstanding purchased call premiums at year end were 0.5 percent of the fund.

PM Updates - September 2017

As of September 30, 2017, the Net Asset Value (“NAV”) of TCT.UN increased to $10.02 from the June 30 value of 9.81. Unitholders received a distribution of $0.18394 during the quarter in accordance with the distribution policy of 7.5% per annum of the NAV per unit. The unit’s last trading price on September 29, 2017 was $9.95, this represents a discount of 0.7% to its underlying NAV.

The S&P TSX Composite had a total return of 3.7% during the quarter closing at it’s high of 15,635. The index closed at a low of 14,952 on August 21st. Canadian Financials outperformed the broader Canadian market as the S&P/TSX Capped Financials Index posted a total return of 4.5% over the quarter. The return on an equal weighted basket of the ten portfolio stocks was 4.9%. The total return for the Fund was 4.1%.

The S&P/TSX Life and Health Insurance Index outperformed the S&P Diversified Bank Index Total Return Index over the past quarter with a return of 5.8% versus 4.6%. The standout performers in the portfolio were the National Bank of Canada on the upside with a return of 11.2% while the Bank of Montreal was at the lower end of the spectrum, essentially flat for the period.

Annual dividend growth rates averaged 6.9% for the portfolio holdings for four quarters ending calendar Q3. The bank holdings annual dividend growth averaged 5.9% lagging the insurance companies at 8.6%. The five-year average rate of dividend increase was 6.8% for the portfolio holdings on a weighted average basis. This figure is up marginally from the Q2 five year dividend growth rate of 5.7%.

The 30 Day historical volatility in the S&P/TSX Capped Financials ETF (XFN) hit a low of 5.9% in early August climbing to a high of 36.9% at the end of September. The Fund had an average cash position of 2.5% over the quarter. Average covered call writing strategies decreased to 3.5% from 6.1% from the second quarter. The overwritten position reached a high of 9.0%. There were no put option transactions executed in the Fund in the third quarter.

PM Updates - June 2017

As of June 30, 2017, the Net Asset Value (“NAV”) of TXT.PR.A was $12.50. A quarterly distribution of $0.19531 was declared and paid to Preferred Security unit holders of record June 15, 2017 representing a yield of 6.25% based on the original issue price of $12.50.

The June 30, 2017 Net Asset Value of TXT.UN came in at $4.17, down from $4.94 March 31, 2016. A quarterly distribution of $0.07106 was declared and paid to Capital unit holders of record as at June 15, 2017 in accordance with the distribution policy of 7.5% per annum of the NAV of the capital unit.

The capital unit’s last trading price on June 30, 2017 was 3.90. This represents a 6.5 % discount to its underlying NAV. The preferred share last price for the quarter on June 27, 2017 was $13.34 representing a 6.7 % premium to net asset value. The combined unit, capital and preferred shares, closed the quarter at a 3.4 % premium to NAV.

The S&P TSX Composite had a total return of -1.6 % over the quarter closing at 15,182. The high close of 15,745 occurred on April 25nd and closed at a low of 15,149 on June 21st. Canadian Financials outperformed the broader Canadian market as the S&P/TSX Capped Financials Index posted a total return of -0.9 % over the quarter. The return on an equal weighted basket of the ten portfolio stocks was -1.7 %. The total fund return for the second quarter was -2.9 %. Class A share returned -14.22 % while the preferred share returned 1.6 %.

The S&P/TSX Life and Health Insurance Index outperformed the S&P Diversified Bank Index Total Return Index over the past quarter with a return of -0.4 % versus -1.7 %. The top bank and insurance holdings were the Bank of Nova Scotia and Manulife Financial with gains of 1.2 % and 4.0 % respectively. The laggards were CIBC and Sun Life Financial returning -7.0 % and -3.6 % respectively.

Annual dividend increases averaged 6.9 % for the portfolio holdings for four quarters ending calendar Q2. The bank holdings averaged 6.0 % lagging the insurance companies at 8.3 %. The five-year average rate of dividend increase was 6.7 % for the portfolio holdings on a weighted average basis.

The 30 Day historical volatility in the S&P/TSX Capped Financials ETF (XFN) hit a low of 8.6 % mid-April climbing to a high of 13.7 % near the end of May then dropping back down to 8.9 % at the end of June. The fund had an average cash position of 3.8 % over the quarter. Average covered call writing strategies increased to 6.0 % in the second quarter from 5.6 % in the first quarter. The overwritten position reached a high of 13.7 %. There were no put option transactions executed in the fund in the second quarter.

PM Updates - June 2017

As of June 30, 2017, the Net Asset Value (“NAV”) of TCT.UN decreased to $9.81 from the March 31 value of 10.30. Unitholders received a distribution of $0.1815 during the quarter in accordance with the distribution policy of 7.5 % per annum of the NAV per unit. The unit’s last trading price on June 30, 2017 was $10.25 This represents a premium of 4.5 % to its underlying net asset value.

The S&P TSX Composite returned -1.6 % including dividends over the quarter closing at 15,182. The high close of 15,745 occurred on April 25nd and the index posted a low close of 15,149 on June 21st . Canadian Financials outperformed the broader Canadian market as the S&P/TSX Capped Financials Index posted a total return of -0.9 % over the quarter. The return on an equal weighted basket of the ten portfolio stocks was -1.7 %. The total fund return for the second quarter was -3.0 %.

The S&P/TSX Life and Health Insurance Index outperformed the S&P Diversified Bank Index Total Return Index over the past quarter with a return of -0.4 % versus -1.7 %. The top bank and insurance holdings were the Bank of Nova Scotia and Manulife Financial with gains of 1.2 % and 4.0 % respectively. The laggards were CIBC and Sun Life Financial returning -7.0 % and -3.6 % respectively.

Annual dividend increases averaged 6.9 % for the portfolio holdings for four quarters ending calendar Q2. The bank holdings averaged 6.0 % lagging the insurance companies at 8.3 %. The five-year average rate of dividend increase was 6.7 % for the portfolio holdings on a weighted average basis.

The 30 Day historical volatility in the S&P/TSX Capped Financials ETF (XFN) hit a low of 8.6 % in mid-April climbing to a high of 13.7 % near the end of May then dropping back down to 8.9 % at the end of June. The fund had an average cash position of 3.4 % over the quarter. Average covered call writing strategies increased to 6.1 % in the second quarter from 5.6% in the first quarter. The overwritten position reached a high of 13.7 %. There were no put option transactions executed in the fund in the second quarter.

PM Updates - March 2017

As of March, 31 2017, the Net Asset Value (“NAV”) of TCT.UN increased to $10.30 from $10.24 on December 31, 2016. Unitholders received a distribution of $0.19706 during the quarter in accordance with the distribution policy of 7.5 percent per annum of the NAV of the unit. The unit’s last trading price on March 31, 2017 was $10.11, which represents a discount of 1.8 percent to its underlying NAV.

The S&P TSX Composite Index returned 2.4 percent, including reinvestment of dividends, over the quarter closing at 15,548. Canadian Financials outperformed the broader Canadian market as the S&P/TSX Capped Financials Index (XFN) posted a total return of 3.4 percent over the quarter. The return on an equal weighted basket of the ten portfolio stocks was 3.6 percent. The total fund return for the fourth quarter was 2.5 percent.

The S&P/TSX Life and Health Insurance Index underperformed the S&P Diversified Bank Index Total Return Index over the past quarter with a return of 0.1 percent vs. 4.6 percent of the latter. The returns of our portfolio holdings followed the same pattern as the insurance and bank indexes. The insurance company returns underperformed at 2.2 percent vs. 4.5 percent of the banks. The top bank and insurance holdings were Royal Bank of Canada and Industrial Alliance Insurance and Financial Services Inc. with gains of 7.6 percent and 8.6 percent respectively. The laggards were Sun Life Financial Inc. and Manulife Financial Corp. returning -5.0 percent and -0.5 percent respectively.

Annual dividend increases averaged 7.2 percent for the portfolio holdings for the four quarters ending calendar Q1 of 2017. The dividend increases of bank holdings averaged 6.2 percent per annum lagging the insurance companies at 8.4 percent. The five-year average rate of dividend increase was 6.6 percent for the portfolio holdings on a weighted average basis.

The 30-Day historical volatility in the S&P/TSX Capped Financials ETF (XFN) hit a low of 7.0 percent near the end of February climbing to a high of 10.7 at the end of March. The quarter started at just over 8 percent volatility and ended near the highs of about 10.5 percent. The Fund had an average cash position of 3.0 percent. Average covered call writing strategies decreased to 5.6 percent from 6.2 percent in Q4 of 2016 and the overwritten position reached a high of 15.5 percent. There were no put option transactions executed in the Fund in the first quarter.

PM Updates - December 2016

As of December 31 2016, the Net Asset Value (“NAV”) of TCT.UN increased to $10.24 from $9.32 on September 30, 2016. Unitholders received a distribution of $0.19219 during the quarter in accordance with the distribution policy of 7.5 percent per annum of the NAV of the unit. The unit’s last trading price on December 29, 2016 was $9.94, which represents a discount of 2.9 percent to its underlying NAV.

The S&P/TSX Composite Index returned 4.5 percent including dividends over the quarter closing at 15,288. Canadian Financials outperformed the broader Canadian market as the S&P/TSX Capped Financials Index (XFN) posted a total return of 11.3 percent during the quarter. The return on an equal weighted basket of the ten portfolio stocks was 15.4 percent. The total fund return for the fourth quarter was 12.0 percent.

The S&P/TSX Life and Health Insurance Index beat the S&P Diversified Bank Index Total Return Index over the past quarter with a return of 21.4 percent versus 12.5 percent of the latter. It is a very good indication that the Financials stocks were strong when the lowest performer, the Bank of Nova Scotia, returned 8.6 percent over the quarter. Manulife Financial Corp. had the highest return at 30.2 percent.

Common dividends increased an average of 6.4 percent when compared to the same quarter last year. The bank distributions were up 6.5 percent while the insurance holdings were up 8.3 percent. Comparing calendar Q4 to Q3 this year, the average dividend increase for the portfolio holdings was 1.0 percent even though less than half of the names chose to increase distributions since September. Sun Life Financial Inc. was the pleasant outlier with a 3.7 percent quarterly increase.

The 30-Day historical volatility in the S&P/TSX Capped Financials ETF (XFN) hit a low of 6.2 percent at the end of October steadily climbing to a high point of 10.5 percent in mid-December. The quarter ended with the volatility levels around 8 percent. The Fund had an average cash position of 4.0 percent. Average covered call writing strategies increased to 6.2 percent from 3.7 percent in Q3 and the Fund ended the quarter with nil percent of the portfolio written. There were no put option transactions executed in the Fund in the fourth quarter.

PM Updates - September 2016

As of September 30 2016, the Net Asset Value (“NAV”) of TCT.UN increased to $9.32 from $9.03 on June 30, 2016. Unitholders received a distribution of $0.17738 during the quarter in accordance with the distribution policy of 7.5 percent per annum of the NAV of the unit. The unit’s last trading price on September 30, 2016 was $9.05, which represents a discount of 2.9 percent to its underlying NAV.

The S&P/TSX Composite returned 5.4 percent including dividends over the quarter closing at 14,726. The index posted a low of 14,134 on July 7th and a high of 14,813 on September 6th. Canadian Financials outperformed the broader Canadian market as the S&P/TSX Capped Financials Index (XFN) posted a total return of 6.6 percent during the quarter. The return on an equal weighted basket of the ten portfolio stocks was 6.4 percent. The total return of the Fund for the third quarter was 5.2 percent.

The S&P Diversified Bank Index beat the S&P/TSX Life and Health Insurance Index over the past quarter with a total return of 7.2 percent versus 3.5 percent. The laggards of last quarter, were Great West Lifeco and Sun Life Financial returning -4.2 and -1.6 percent respectively. Industrial Alliance and the Bank of Nova Scotia (BNS) were the top performers at 17.1 percent and 11.0 percent respectively. The median performers in the portfolio were CIBC at 6.1 percent and Toronto Dominion Bank at 6.0 percent.

For the most part, dividends remained unchanged from the last quarter. BNS and Royal Bank were the exceptions raising their distributions by 2 cents to $0.74 and $0.83 respectively. More impressively, the distributions for the portfolio holdings this quarter compared with the same quarter of 2015 averaged 6.6 percent higher. The banks’ were up 5.9 percent and the insurers’ were up 7.2 percent. Longer term, the five-year dividend growth for all portfolio holdings averaged 6.3 percent. The average five-year earnings growth was 7.2 percent.

The 30-Day historical volatility in the S&P/TSX Capped Financials ETF (XFN) hit a high of 15.6 percent in mid-July then moved down to more moderate levels of about 8 percent in mid-August through the remainder of the quarter. The Fund had an average cash position of 5.6 percent. Average covered call writing strategies decreased to 3.7 percent from 7.8 percent in Q2 and the overwritten position reached a high of 8.6 percent during the period. There were no put option transactions executed in the Fund in the third quarter.

PM Updates - June 2016

As of June 30 2016, the Net Asset Value (“NAV”) of TCT.UN decreased to $9.03 from $9.26 on March 31, 2016. Unitholders received a distribution of $0.17944 during the quarter in accordance with the distribution policy of 7.5 percent per annum of the NAV of the unit. The unit’s last trading price on June 30, 2016 was $8.85, which represents a discount of 2.0 percent to its underlying NAV.

The S&P/TSX Composite Index returned 5.1 percent over the quarter. The Index closed the quarter at 14,065 after posting a low of 11,843 in late January and a high of 15,451 in mid-April. Canadian Financials underperformed the broader Canadian market as the S&P/TSX Capped Financials Index (XFN) posted a total return of 0.8 percent during the quarter. The return on an equal weighted basket of the ten portfolio stocks was 1.7 percent. The total return of the Fund for the second quarter was negative 0.5 percent.

The S&P Diversified Bank Index Total Return Index beat the S&P/TSX Life and Health Insurance Index over the past quarter with a return of 2.2 percent vs. negative 2.0 percent. The laggards of last quarter were Great West Lifeco and Manulife Financial returning negative 3.7 and negative 2.9 percent respectively. The National Bank of Canada and the Bank of Montreal were the top performers at 5.3 percent and 5.0 percent respectively.

Quarter over quarter (2016 vs. same period 2015), dividend increases averaged 7.6 percent for all of our holdings. The Insurance companies edged out the banks with an average dividend increase of 9.0 percent vs. 6.8 percent for the banks. Outliers on the upside were Industrial Alliance (14.3 percent), and CIBC (11 percent). Five-year earnings growth on our holdings averaged 13.3 percent. In contrast to the dividend history, the earnings growth story is reversed. The bank earnings growth is lower at 6.7 percent as compared to the insurance holdings growth rate of 23.3 percent.

The 30-day historical volatility in the S&P/TSX Capped Financials ETF (XFN) hit a high of 15.5 percent at the end of the quarter from more sedate levels between 9.5 and 13.5 percent over most of the last three months. The Fund had an average cash position of 4.4 percent. Average covered call writing strategies decreased to 7.8 percent from 14.4 percent in Q1.The overwritten position reached a high of 15 percent in the quarter. There were no put option transactions executed in the Fund in the second quarter.

PM Updates - March 2016

As of March 31, 2016, the Net Asset Value (“NAV”) of TCT.UN decreased to $9.26 from $9.53 on December 31, 2015. Unitholders received a distribution of $0.166690 during the quarter in accordance with the distribution policy of 7.5 percent per annum of the NAV of the unit. The unit’s last trading price on March 31, 2016 was $8.90, which represents a discount of 3.9 percent to its underlying NAV.

The S&P TSX Composite Index returned 4.5 percent in the quarter. The Index closed the quarter at 13,494 posting a low of 11,530 in late January. Canadian Financials underperformed the broader Canadian market as the S&P/TSX Capped Financials Index (XFN) posted a total return of 3.1 percent during the quarter. The return on an equal weighted basket of the ten portfolio stocks was 1.8 percent. The Fund’s total return for the first quarter was -1.1 percent.
The S&P Diversified Bank Index Total Return Index handily beat the S&P/TSX Life and Health Insurance Index over the past quarter with a return of 5.5 percent vs. -4.2 percent. The laggards of prior quarter, namely The Bank of Nova Scotia, CIBC, and National Bank of Canada, were the Fund’s top performers in Q1 returning 13.4, 7.7, and 6.7 percent respectively. Manulife Financial and Industrial Alliance trailed, returning -10.5, and -10.4 percent respectively.

This past quarter (q4 reporting for insurance companies) Manulife was the only one of our insurance holdings to raise its dividend. They bumped their distribution by 1.5 cents to $0.185 per quarter for an 8.8 percent increase. CIBC, Scotiabank, and RBC all raised their distributions between 2.5 and 3 percent. TD’s dividend increase was 7.8 percent to 55 cents per common share.

The insurance companies reported their fourth quarter earnings in February. All of our insurance holdings reported higher earnings as compared with Q4 2015.The standout was Sun Life Financial with core earnings increasing 26.5 percent over the same quarter last year. Great West Life lagged with a 4.7 percent increase in quarter to quarter (2015 Q4 vs. 2014 Q4) earnings growth. Insurance companies in Canada continued to remain in a strong capital position with very healthy reserves. Canadian banks reported Q1 2016 earning and, with the exception of RBC, they all improved on their Q1 2015 earnings. Royal Bank earnings this year relative to Q1 last year fell by a marginal 1.8 percent.

The 30 Day historical volatility in the S&P/TSX Capped Financials ETF (XFN) ranged from a low of 13.7 percent at the beginning of the quarter to a high of around 23.5 over the month of March. The Fund had cash position at the end of the first quarter of 6.8 percent. Average covered call writing strategies increased to 14.4 percent from 7.4 percent in Q4 2015.The overwritten position reached a high of 28.1 percent in the quarter. There were no put option transactions executed in the Fund during the first quarter.

PM Updates - December 2015

As of December 31, 2015, the Net Asset Value (“NAV”) of TCT.UN decreased to $9.53 from $9.56 on September 30, 2015. Unitholders received a distribution of $0.18881 during the quarter in accordance with the distribution policy of 7.5 percent per annum of the NAV of the unit. The unit’s last trading price on December 31, 2015 was $9.98, which represents a premium of 4.7 percent to its underlying NAV.

The S&P TSX Composite Index returned -1.4 percent in the quarter. The index closed the quarter at 13,010 posting a low of 12,618 in mid-December. The high of 14,053 was reached in mid-October. Canadian Financials outperformed the broader Canadian market as the S&P/TSX Capped Financials Index (XFN) posted a total return of 1.5 percent over the quarter.
The return on an equal weighted basket of the ten portfolio stocks was 2.6 percent. The Fund’s total return for the fourth quarter was 1.6 percent.

The S&P Life and Health Insurance Total Return Index beat the S&P/TSX Diversified Banks Total Return Index over the past quarter with a return of 3.1 percent. The S&P/TSX Diversified Banks Total Return Index was 1.4 percent. The top three performers in the Fund were Industrial Alliance Insurance, Great West Lifeco and the Bank of Montreal returning 11.6, 9.0 and 8.4 percent respectively. The National Bank of Canada, CIBC, and the Bank of Nova Scotia lagged with returns of -4.1, -3.7 and -2.5 percent respectively. Our insurance company holdings’ median return of 5.1 percent far outpaced the bank holdings’ median return of -0.5 percent.

Sun Life Financial was the only one of our insurance holdings to raise its dividend. They bumped up their quarterly distribution by 1 cent to $0.39 for a 2.6 percent increase. The Bank of Montreal, CIBC and the National Bank of Canada raised dividends by 2.4, 2.6 and 3.8 percent respectively. All of our other holdings held their distribution levels constant from the third quarter.

The insurance companies reported their third quarter earnings in November. All of our insurance holdings with the exception of Manulife Financial saw higher earnings as compared with Q3 2014. Once again, the market had factored this in as the quarterly return on Manulife was 1.3 percent, a positive figure but shy of the average 3.1 percent we saw in the S&P Life and Health Total Return Index. Insurance companies in Canada continued to remain in a strong capital position with very healthy reserves. All our bank holding returns were stronger than both consensus estimates and Q4 2014 results across the board.

The Fund maintained an average cash position of 5.3 percent over the period, closing the quarter at 1.9 percent. Average covered call writing strategies decreased to 4.9 percent from 7.9 percent in Q3.The overwritten position got as high as 12.5 percent in the quarter. The 30 Day historical volatility in the S&P/TSX Capped Financials ETF (XFN) ranged from a high of 23.9 percent at the beginning of the quarter to a low of 12.6 in early December. There were no put option transactions executed in the Fund over the fourth quarter.

PM Updates - September 2015

As of September 30, 2015, the Net Asset Value (“NAV”) of TCT.UN decreased to $9.56 from $10.15 on June 30, 2015. Unitholders received a distribution of $0.18488 during the quarter in accordance with the distribution policy of 7.5 percent per annum of the NAV of the unit. The unit’s last trading price on September 30, 2015 was $9.32, which represents a discount of 2.5 percent to its underlying NAV.

The S&P TSX Composite returned negative 7.8 percent in the quarter. The Index closed the quarter at 13,307 posting a low of 13,719 toward the end of August. The high was 13,818 achieved in mid-July. Canadian Financials outperformed the broader Canadian market as the S&P/TSX Capped Financials Index (XFN) posted a total return of negative 3.4 percent over the quarter.

The S&P Life and Health Insurance Total Return Index lagged the S&P/TSX Diversified bank over the past quarter with a return of negative 7.2 percent. The S&P/TSX Diversified Banks Total Return Index was negative 0.3 percent. CIBC and Sun Life Financial were standouts returning 5.4 and 4.2 percent respectively. TD Bank got a honorable mention with a 0.1 percent positive result. All the other portfolio holdings failed to find themselves in positive territory. Great West Lifeco and Manulife Financial lagged the group with quarterly negative returns of 11.2 and 10.4 percent respectively.

Scotiabank, CIBC, and the Royal Bank boosted distributions between 2.5 and 3.0 percent during the quarter. Q3 2015 earnings improved on the 2014 results across the board. They also beat earnings per share consensus expectations by an average of 3.6 percent.

While Manulife Financial and Sun Life Financial both raised dividends in Q2, Industrial Alliance was the only one to do so this quarter with an increase of 7.1 percent. The insurance companies reported their second quarter earnings in August. Manulife Financial was the only insurance company in the group with negative earnings growth year on year. Great West Lifeco, despite missing expectations, had a year over year improvement of 6.5 percent on core earnings per share. Insurance companies in Canada continued to remain in a strong capital position with very healthy reserves.

The Fund maintained an average cash position over the quarter of 9.6 percent before closing the quarter at 15.2 percent due to greater market uncertainty. Covered call writing decreased to an average of 7.9 percent from 9.6 percent in Q2.The overwritten position got as high as 12.1 percent in the quarter. The 30-Day historical volatility in the S&P/TSX Capped Financials ETF (XFN) ranged from a low of 11.8 percent at the start of the quarter to a high of 23.9 percent at the close of the quarter. There were no put option transactions executed in the Fund over the third quarter.

PM Updates - June 2015

As of June 30, 2015, the Net Asset Value (“NAV”) of TCT.UN decreased to $10.15 from $10.27 on March 31, 2015. Unitholders received a distribution of $0.19613 during the quarter in accordance with the distribution policy of 7.5% per annum of the NAV of the unit.

The unit’s last trading price on June 30, 2015 was $10.00, which represents a discount of 1.5 percent to its underlying NAV.

Canadian Financials outperformed the broader Canadian market as the S&P/TSX Capped Financials Index (XFN) posted a total return of 0.5 percent over the quarter.

The two outstanding performers were Manulife Financial (up 8.7 percent), and Sun Life Financial (up 7.9 percent). The Toronto-Dominion Bank and the Bank of Montreal disappointed somewhat with returns of negative 1.2 percent and negative 1.5 percent respectively.

Great West Lifeco and Industrial Alliance showed improved earnings per share (EPS) over Q1 2014 and also beat analyst consensus EPS expectations. Manulife Financial and Sun Life Financial both suffered EPS declines as well as missing consensus expectations. The market seems to see through these earnings somehow as these two stocks are the same ones that outperformed the whole fund universe. Insurance companies in Canada continue to remain in a strong capital position with very healthy reserves.

The Fund maintained an average cash position over the second quarter of 3.3 percent. Covered call writing strategies increased 2.3 percentage points from last quarter moving to an average of 9.6 percent in Q2. The overwritten position got as high as 15.9 percent in the quarter. The 30-day historical volatility in the S&P/TSX Capped Financials ETF (XFN) ranged from a high of 12.7 percent at the beginning of the quarter to a low of 7.1 percent in mid-May. The 30-day historical volatility closed out the quarter near the high at 12.2 percent. There were no put option transactions executed in the Fund over the second quarter.

PM Updates - March 2015

As of March 31, 2015, the Net Asset Value per unit of TCT.UN was $10.27 vs. $10.85 on December 31, 2014. Unitholders’ received a regular distribution of $0.19875 per unit during the quarter.

On March 31, 2015 the closing market price of the Unit was $10.10 which represents a 1.6% discount to its underlying NAV.

The S&P/TSX Capped Financials Index posted a total return of negative 2.1% for the quarter underperforming the broader market as concerns from declining oil prices affected the outlook for the banks and the drop in the overnight rate by the Bank of Canada reduced the outlook for the insurers.

Great West Lifeco was the standout performer this quarter with a return of 10.0%, which is in stark contrast to the balance of the portfolio which had returns ranging from -1.5% to -7.0% amid earnings reports that met or slightly exceeded analyst expectations but failed to ignite share prices.

Balance sheets among the insurers remain strong with healthy capital reserves.

Call writing increased this quarter to an average of 7.3% written with a high of 15.6% of the fund overwritten during the quarter. Volatility declined generally declined from a high of 18.3 in mid-February to close the quarter at 12.7%.

The Fund was generally fully invested during the period and ended the quarter with a cash position of 2.5% vs 0.5% at the end of the previous quarter.

PM Updates - December 2014

As of December, 2014, the Net Asset Value (“NAV”) of TCT.UN decreased to $10.85 from $11.08 on September 30, 2014. Unitholders received a distribution of $0.21619 during the quarter in accordance with the distribution policy of 7.5% per annum of the NAV of the unit.

The unit’s last trading price on December 31, 2014 was $11.43, which represents a premium of 3.5 percent to its underlying NAV.

The S&P TSX Composite returned -1.5 percent in the quarter. The index made a high of 15,184 towards the end of November checking back to 14,632 at the end of December. Canadian Financials outperformed the broader market Canadian Market as the S&P/TSX Capped Financials Index posted a total return of 1.2 percent over the quarter. The return on an equal weighted basket of the ten portfolio stocks was 0.8 percent. The total return of the Fund for the fourth quarter was -0.2 percent.

The total return of the ten individual financial stocks within the portfolio was generally mixed this quarter. The Fund was led by Great –West Lifeco, Sun Life Financial, and Manulife financial returning 4.3 percent, 3.3 percent, and 3.0 percent respectively. Laggards were the Bank of Nova Scotia, Industrial Alliance, and the National Bank of Canada returning -4.3 percent, -4.2 percent, and -3.1 percent respectively. With the exception of Industrial Alliance, the insurance companies handily outperformed the bank stocks. The S&P Life and Health Insurance Total Return Index was 3.8 percent and the S&P/TSX Diversified Banks Total Return Index was 0.1 percent.

CIBC and the Bank of Montreal both had earnings that fell short of Q4 2013. The Bank of Montreal dropped 5 cents from the Q4 2013 to $1.57 per share also falling just shy of analysts’ expectations. CIBC Q4 2014 dropped 10 cents from the 4th quarter earnings last year, also shy of consensus expectations. Otherwise the rest of the bank holdings all had earnings that beat the Q4 levels of 2013. Though generally a bit lower than average analysts’ expectations, the earnings results look fairly robust. Dividend levels continued to increase for the Bank of Montreal, CIBC, and the National Bank of Canada as they bumped distributions between 2 and 3 cents per share last quarter. The Bank of Nova Scotia, Royal Bank of Canada, and The TD Bank all held the line on distribution levels but the recent dividend trend for these three banks has been positive.

Industrial Alliance earnings fell $0.16 from Q3 2013 to Q3 2014. The company warned that they would expect continued weakness in the group insurance line. The other Canadian life insurance companies in the portfolio reported third quarter earnings during the period that were in line or better than analysts’ expectations. Industrial Alliance increased their dividend 2 cents to $0.28. All the other insurance companies in the portfolio held their dividends steady over the quarter. All have a strong minimum continuing capital and surplus requirements ratios. The strong financial position of insurers could lead to the other three insurers increasing their payouts or repurchasing shares.

The Fund maintained an average cash position over the fourth quarter of 1.9 percent. Average covered call writing strategies were relatively the same as last quarter moving from with an average of 1.7 percent Q3 to 1.8 percent Q4. The overwritten position got as high as 9.8 percent in Q4 unchanged from Q3. The 30 Day historical volatility in the S&P/TSX Capped Financials ETF (XFN) ranged from a low of 8 percent in late November after hitting a high of 16.3 percent at the beginning of the month. 30 day historical volatility closed out the quarter closer to the high at 13.5 percent. There were no put option transactions executed in the Fund over the third quarter.

PM Updates - September 2014

As of September 30, 2014, the Net Asset Value (“NAV”) of TCT.UN increased to $11.08 compared to $10.90 on June 30, 2014. Unitholders received a distribution of $0.21525 during the quarter in accordance with the distribution policy of 7.5% per annum of the NAV of the unit.

The unit’s last trading price on September 30, 2014 was $11.05, which represents a discount of 0.3% to its underlying net asset value.

The S&P/TSX Composite returned -0.6 percent in the quarter. The index made a few rallies in the latter half of July and August before dropping off to around the 15,000 level at the end of September. Canadian Financials outperformed the broader market as the S&P/TSX Capped Financials Index posted a total return of 2.7 percent over the quarter. The total fund return for the second quarter was 3.6 percent.

The total return of the ten financial stocks within the portfolio was generally positive again this quarter. The fund was led by the National Bank of Canada at 13.8 percent and Great West Lifeco returning 7.8 percent.
The laggards were the Bank of Nova Scotia at -2.6 percent and Industrial Alliance with -0.3 percent. As a group, the insurance companies marginally outperformed the bank stocks as the S&P Life and Health Insurance Total Return Index was 3.7 percent and the S&P/TSX Diversified Banks Total Return Index was 3.0 percent.

The Canadian bank holdings in the portfolio reported third quarter earnings that were generally in line or higher than analyst’s estimates. All of the major banks improved on third quarter earnings from 2013. The Bank of Nova Scotia, the Royal Bank of Canada, and Toronto-Dominion Bank increased their dividend by 2 cents, 4 cents and 2 cents per share respectively. The Bank of Montreal, the Canadian Imperial Bank of Commerce and the National Bank of Canada all held their dividends steady from the second quarter. The general trend amongst all the major Canadian Banks has been to moderately increase dividends over the last several years.

The Canadian life insurance companies in the portfolio reported second quarter earnings during the period that were in line or better than analysts’ expectations. Manulife Financial Corp. increased its dividend by 2.5 cents per share while each of the other insurance companies in the portfolio held their dividends steady over the quarter. All of the insurance companies in the portfolio have strong minimum continuing capital and surplus requirements ratios. Although dividends for the insurance companies have remained largely unchanged over the past number of years, their strong financial position could lead to some companies increasing their payouts or repurchasing shares.

The fund maintained an average cash position over the fourth quarter of 1.7 percent. Covered call writing strategies declined to an average of 1.7 percent down from 3.8 percent the prior quarter. The highest overwritten position got as high as 9.8 percent in Q3 down from the 12.1 percent high in Q2. The 30 Day historical volatility in the S&P/TSX Capped Financials ETF (XFN) ranged from a low of 4.7% percent in July hitting a high of 9.7 percent at the end of September. The historical volatility closed out the quarter just below 9.4 percent. There were no put option transactions executed in the fund over the third quarter.

PM Updates - June 2014

As of June 30, 2014, the Net Asset Value (“NAV”) of TCT.UN increased to $10.90 compared to $10.66 on March 31, 2014. Unitholders received a distribution of $0.20138 during the quarter in accordance with the distribution policy of 7.5% per annum of the NAV of the unit.

The unit’s last trading price on June 30, 2014 was $10.83, which represents a slight discount of 0.6% to its underlying NAV.

The S&P/TSX Composite returned 6.41% in the quarter. Around half of that return occurred over the month of May. Canadian Financials underperformed the broader market slightly as the S&P/TSX Capped Financials Index posted a total return of 5.7% over the quarter. The return on an equal weighted basket of the ten portfolio stocks was 4.6%. The total return of the Fund for the second quarter was 4.2%.

The total return of the ten financial stocks within the portfolio was positive over the quarter. The bank holdings generally outperformed the Fund’s insurance holdings. Reversing a recent trend, the S&P/TSX Diversified Banks Total Return Index was 7.2% while the S&P Life and Health Insurance Total Return Index was 1.8%. The portfolio was led by the Bank of Nova Scotia at 12.1% and the Bank of Montreal returning 7.2%. The laggards were Manulife and Great West Lifeco both squeaked in at 0.1%.

The Canadian bank holdings in the portfolio reported second quarter earnings that were generally higher than analysts’ estimates. Bank of Nova Scotia, Royal Bank, and TD Bank all held their dividends steady from the first quarter. CIBC increased its dividend by 2 cents per share to $1.00 and the National bank of Canada increased its dividend to 48 cents up 2 cents per share.

The Canadian life insurance companies in the portfolio reported first quarter earnings during the period that were in line with analysts’ expectations. Each of the insurance companies held their dividends steady over the quarter. All have a strong minimum capital and surplus requirements. Although dividends were unchanged, their strong financial position could lead to some companies increasing their payouts or buying back shares.

The Fund maintained an average cash position over the fourth quarter of 1.5%. Covered call writing strategies declined to an average of 3.8% from 5.8% the prior quarter. The overwritten position got as high as 12.1% in Q2. The 30 Day historical volatility in the S&P/TSX Capped Financials ETF (XFN) ranged from a low of 6.3% to a high of 7.9% both in May. The historical volatility closed out the quarter just below 6.5%. There were no put option transactions executed in the Fund over the third quarter.

PM Updates - March 2014

As of March 31, 2014, the Net Asset Value (“NAV”) of TCT.UN decreased to $10.66 compared to $10.82 on December 31, 2013. Unitholders received a distribution of $0.20156 during the quarter in accordance with the distribution policy of 7.5% per annum of the NAV of the unit.

The unit’s last trading price on March 31, 2014 was $10.79, which represents a premium of 1.2% to its underlying NAV.

The S&P TSX Composite Index returned 5.5% for Q1 of 2014. January was somewhat range bound. Most of the positive moves occurred in February with March effectively performing flat. The Financials sector underperformed the broader Canadian market as the S&P/TSX Capped Financials Index (XFN) posted a total return of 2.5% over the quarter. The return on an equal weighted basket of the ten portfolio stocks was 1.5%. The total fund return for the 1st quarter was 0.3%, lagging the benchmark due to an excess cash position that was established in early January to facilitate the December annual redemption. A relatively higher level of option writing at the end of January and into February, on higher volatility attributed to tensions between Ukraine and Russia, also contributed to the drag as the stocks continued to advance.

Seven of the ten financial stocks within the portfolio had positive returns over the quarter. The bank holdings generally outperformed the Fund’s insurance holdings. The S&P/TSX Diversified Banks Total Return Index was 2.9% while the S&P Life and Health Insurance Total Return Index was 1.3%. The portfolio was led by the Canadian Imperial Bank of Commerce and the Bank of Montreal returning 5.0% and 4.5% respectively. The Bank of Nova Scotia and Great West Lifeco Inc. lagged with negative returns of 3.6% and 7.0% respectively.

The Canadian bank holdings in the portfolio reported 1st quarter earnings that were generally higher than analysts’ estimates. All of the banks either increased their dividends in the quarter or announced increases for Q2. National Bank of Canada and The Toronto-Dominion Bank both declared a 2 for 1 stock split. As at the end of the quarter, the Fund is overweight banks as they are expected to continue to perform well.

The Canadian life insurance companies in the portfolio reported 4th quarter earnings that were mostly in line or better than analysts’ expectations. Great-West Lifeco’s earnings were marginally below expectations; however, synergies with the Irish Life acquisition are expected to enhance the company’s business profile. Industrial Alliance Insurance raised its dividend to 26.0 cents per share from 24.5 cents per share. All insurance companies have a strong minimum capital and surplus requirements. Although dividends are largely unchanged, their strong financial position could lead to some companies increasing their payouts or share buybacks. Although the Fund is underweight the insurers relative to its bank holdings, we remain positive on the insurance companies and the financial stocks in general.

The Fund maintained an average cash position over the 1st quarter of 2.9%. Covered call writing strategies for the quarter averaged 5.8% and got as high as 20.3%. The 30-day historical volatility in the S&P/TSX Capped Financials Index (XFN) ranged from 6.7% at the end of the quarter to 13.0% at around mid-February. Average implied volatilities were somewhat higher, ranging from 9.8% to 13.8%. There were no put option transactions executed in the Fund over the 1st quarter.

PM Updates - December 2013

As of December 31, 2013, the Net Asset Value (“NAV”) of TCT.UN increased to $10.82 compared to $10.03 on September 30, 2013. In addition, Unitholders received a distribution of $0.206630 during the quarter in accordance with the distribution policy of 7.5 percent per annum of the NAV of the unit.

The unit’s last trading price on December 31, 2013 was $10.55, which represents a discount of 2.5 percent to its underlying NAV.

The S&P TSX Composite returned 7.3 percent with most of the positive moves occurring in October and December. Canadian Financials outperformed the broader Canadian market as the S&P/TSX Capped Financials Index posted a total return of 10.7 percent over the quarter. The total fund return for the fourth quarter was 10.0 percent beating the S&P TSX composite and 70 basis points lower than the S&P/TSX Capped Financials index.

All ten financial stocks within the portfolio had positive returns over the quarter. The insurance holdings outperformed the Fund’s bank holdings. The total return of the S&P/TSX Diversified Banks Index was 9.5 percent while the S&P Life and Health Insurance Index total return was 16.9 percent. The portfolio performance was led by the Manulife Financial, up 23.8 percent. Industrial Alliance was the lowest performing insurance holding with a return of 8.4 percent. Our best bank holding, Bank of Nova Scotia, returned 12.6 percent while the Bank of Montreal lagged the portfolio with a return of 4.0 percent.

The Canadian bank holdings in the portfolio reported fourth quarter earnings that were generally higher than analyst’s estimates. Three of the six major banks announced dividend increases in the quarter while the remainder left distributions unchanged. Banks continued to perform very well in the face of slowing loan growth and margin pressures.

The Canadian life insurance companies in the portfolio reported third quarter earnings during the period that were in line or better than analysts’ expectations. All have a strong minimum capital and surplus requirements. Although dividends have remained unchanged over the recent past, their strong financial position could lead to some companies increasing their payouts or buying back shares. We are positive on the Financial Services sector and the insurance space in particular.

The Fund maintained an average cash position over the fourth quarter of 1.7 percent. Covered call writing for the quarter averaged 3.0 percent. This is in contrast to the preceding two quarters at 9.9 percent and 14.7 percent for the second and third quarter respectively. In Q4 the maximum overwritten exposure peaked at 17.2 percent. The 30 Day historical volatility in the financial indices (S&P/TSX Financials Index) was somewhat subdued ranging from 4.5 to 10.1 percent. There were no put option transactions executed in the Fund over the fourth quarter.

PM Updates - September 2013

As of September 30, 2013, the Net Asset Value (NAV) of TCT.UN increased to $10.03 compared to $9.56 on June 30, 2013. In addition, unitholders received a distribution of $0.18788 during the quarter in accordance with the distribution policy of 7.5% per annum of the NAV of the unit.

The unit’s last trading price on September 30, 2013 was $9.91, which represents a discount of 1.2% to its underlying NAV. The S&P/TSX Composite Index returned 5.24% with the bulk of the return occurred in early July. Canadian Financials outperformed the broader market Canadian market as the S&P/TSX Capped Financials Index posted a total return of 8.45% over the quarter. The Fund returned 6.91% for the quarter settling between the performance of S&P/TSX Composite Index and the S&P/TSX Capped Financials Index.

All ten financial stocks within the portfolio had positive returns over the quarter. Reversing a recent trend, the banks outperformed the insurers. The S&P/TSX Diversified Banks Total Return Index was 9.94% while the S&P Life and Health Insurance Total Return Index was 4.35%. The portfolio was led by the National Bank of Canada, up 14.53%. The Bank of Nova Scotia lagged the bank holdings with a return of 6.05%. Manulife Financial was the lowest performing holding with a return of 1.99%. Sun Life Financial led the insurance company holdings with a return of 6.77%.

All of the Canadian bank holdings reported third quarter earnings that were higher than analyst’s estimates. Three of the six major banks announced dividend increases in the quarter while the remainder left distributions unchanged. The Canadian banks continued to perform very well in the face of slowing loan growth and margin pressures.

The Canadian life insurance companies reported improved second quarter earnings during the period as the negative effect of low interest rates has diminished from premium increases and product repositioning. All holdings except Manulife Financial beat analysts’ expectations. All four of our insurance company holdings improved on earnings from Q3 of 2012.

The Fund maintained an average cash position over the quarter of 2.3%. The Fund employed covered call writing strategies at times as high as 39.1% of the portfolio; however, the average portion of overwriting was 29.1%. Historical volatility in the financial indices fluctuated in the range from a high of 18% tapering to around 7% near the end of the period. There were no put option transactions executed in the Fund over the third quarter.

PM Updates - June 2013

As of June 30, 2013, the Net Asset Value (NAV) of TCT.UN was $9.56 versus $9.49 on March 31, 2013. In addition, unitholders received a cash distribution of $0.18188 during the quarter in accordance with the distribution policy of 7.5% per annum of the NAV of the unit.

The unit’s last trading price on June 28, 2013 was $9.27, which represents a discount of 3.0% to its underlying NAV.

North American equity markets traded in a more volatile manner in the second quarter of 2013 ending about 5% lower than at the end of March. In the April Monetary Policy Report, the Bank of Canada reported that Japan has introduced significant policy stimulus while European Central Bank and the U.S. Federal Reserve continue to maintain easy monetary policy.

The U.S. S&P 500 Composite Index outperformed the S&P/TSX Composite Index on a total return basis during the period, up 2.9% vs. down 4.1% respectively. This continued the trend established in the first quarter. Canadian Financials outperformed the broader Canadian market as the S&P/TSX Capped Financials Index posted a total return of 0.9% during the period.

Eight of the ten Financial stocks within the portfolio had positive returns over the period with the insurers outperforming the banks. The S&P/TSX Diversified Banks Total Return Index was down 1.2% while the S&P/TSX Life & Health Insurance Total Return Index increased 10.5%. The portfolio was led by Sun Life Financial, up 13.7% during the period while The Canadian Imperial Bank of Canada lagged the group during the quarter down 5.1%.

Canadian banks reported second quarter earnings that were in line with or slightly higher than analysts’ estimates. Two of the six major banks announced dividend increases of 2 cents per share in the quarter while the remainder left distributions unchanged. Banks continued to perform reasonably well in the face of slowing loan growth and margin pressures.

The Canadian life insurance companies reported improved first quarter earnings during the period as the negative effect of low interest rates has diminished due to premium increases and product repositioning. Capital positions remain strong and companies have shown confidence by setting impressive earnings growth targets for the next 3 years.

Volatility levels for Canadian Financials picked up at times in April and June; however, they remain moderate by historical standards. Following a light period of overwriting in the first quarter, the Fund was more active in the second quarter with an average overwritten position of 9.9%. The Fund did not engage in any put transaction over the same period.

The Fund maintained a relatively high invested position during the period with an average cash position of 1.3%. The Fund ended the quarter with a cash position of 0.6%.

PM Updates - March 2013

As of March 31, 2013, the Net Asset Value (“NAV”) of TCT.UN was $9.49 versus $9.09 on December 31, 2012. In addition, unitholders received a distribution of $0.18525 during the quarter in accordance with the distribution policy of 7.5% per annum of the NAV of the unit.

The unit’s last trading price on March 31, 2013 was $9.50, which represents a premium of 0.1% to its underlying NAV.

North American equity markets rallied in the first quarter of 2013 as concerns regarding the U.S. budget imbalance at the end of 2012 did not result in a market disruption. This followed mediocre returns in the previous quarter and continued expectations that both the European Central Bank and the U.S. Federal Reserve would maintain quantitative easing.

The US S&P 500 Composite Index outperformed the S&P / TSX Composite Index on a total return basis during the period, up 10.6% and 3.3% respectively. This reversed a two consecutive quarter trend where the Canadian markets outperformed their U.S. counterparts. Canadian Financials outperformed the broader market as the S&P/TSX Capped Financials Index posted a total return of 4.5% during the period. 

Nine of ten Financial stocks within the portfolio had positive returns over the period with the insurers outperforming the banks. The S&P/TSX Diversified Banks Total Return Index was up 3.0% while the S&P/TSX Life and Health Insurance Total Return Index increased 10.5%. The portfolio was led by Industrial Alliance Inc. up 19.9% during the period while The National Bank of Canada lagged the group during the quarter down 2.3%.

Canadian banks reported steady first quarter earnings that were generally in line with analysts’ estimates. Four of the six major banks announced dividend increases in the quarter. In early February, Royal Bank of Canada completed the takeover of Ally Financial Inc. Banks continue to perform well in the face of slowing loan growth and margin pressures.

The Canadian life insurance companies reported improved fourth quarter earnings during the period as the negative effect of low interest rates has diminished from premium increases and product repositioning. Capital positions remain strong and companies have shown confidence by setting impressive earnings growth targets for the next 3 years.

Volatility levels for the Canadian financials remain low by historical standards but increased over Q1 of 2013 after a decline in Q4 of 2012. The Fund was less active in its covered-call writing over this quarter with an average of 1.6% of the portfolio subject to covered calls options and none of the portfolio hedged with protective put options.

The Fund maintained a relatively high invested position during most of the period but started the quarter with a higher than normal cash position of 7.5% in order to finance the annual retraction vs. an average of 3.6% over the entire quarter. The Fund ended the quarter with a cash position of 0.8%.

Earnings growth will be a key driver of Canadian bank performance. Earnings multiples may improve should the housing market experience a soft landing as expected. Slower growth and margin pressures will be limiting factor in the rate of earnings growth. The profitability of Canadian insurance companies is likely to improve in 2013 as earnings sensitivities to equity markets and interest rates have diminished. In the context of low interest rates, the valuations of companies in the portfolio remain at attractive levels when measured by price to earnings ratios and current dividend yields.

PM Updates - December 2012

As of December 31, 2012, the Net Asset Value (“NAV”) of TCT.UN was $9.09 versus $8.66 on September 30, 2012. In addition, unitholders received a distribution of $0.16819 during the quarter in accordance with the distribution policy of 7.5% per annum of the NAV of the unit.

The unit’s closing price on December 31, 2012 was $8.99, which represents a discount of 1.1% to its underlying NAV.

North American equity markets leveled out in the 4th quarter of 2012 over uncertainties surrounding the outcome of the U.S. presidential election in November as well as the pending Fiscal Cliff that was expiring on December 31, 2012. This followed very strong returns in the previous quarter on expectations that both the European Central Bank (ECB) and the U.S. Federal Reserve would enter another round of quantitative easing.

For the second consecutive quarter, the S&P/TSX Composite Index outperformed the U.S. S&P 500 Index on a total return basis during the period, marginally up 1.72% and down 0.38% respectively. Canadian Financials outperformed the broader markets as the S&P/TSX Capped Financials Index posted a total return of 6.78% during the period.

All ten Financial stocks within the portfolio had positive returns over the period with the insurers outperforming the banks. The S&P/TSX Diversified Banks Total Return Index was up 5.78% while the S&P/TSX Life and Health Insurance Total Return Index increased 13.29%. The portfolio was led by Sun Life Financial Inc. during the period, up 17.11%, while The Toronto-Dominion Bank lagged the group during the quarter up 3.11% only.

Canadian banks reported steady fourth quarter earnings that were mostly in line with analysts’ estimates. None of the banks raised their dividends in the quarter, which was expected after all five banks raised their dividends in the previous quarter. Following the announcements of issuer bids by the Canadian Imperial Bank of Commerce and the Royal Bank of Canada last quarter, the Bank of Montreal announced it has filed a normal course issuer bid to purchase its shares in the market.

The Canadian life insurance companies reported improved third quarter earnings during the period as the negative effect of low interest rates has diminished with price increases and product repositioning. Capital positions remain strong and companies have shown confidence by setting impressive earnings growth targets for the next three years.

Volatility levels for the Canadian Financials continued to decline in the fourth quarter other than a brief spike around the U.S. presidential election in November and ended the year towards the low end of the range. The Fund was active in its covered-call writing during the period and ended 2012 with 13.22% of the portfolio subject to covered call options and none of the portfolio hedged with protective put options.

The Fund maintained a high invested position during most of the period but ended the quarter with a cash position of 7.48% in order to finance the annual retraction vs. 0.8% at the end of the previous quarter.

The profitability of Canadian banks is likely to continue to grow in 2013, however, at a slower pace than in 2012 due to decelerating consumer loan growth and net interest compression. On the other hand, the profitability of Canadian insurance companies is likely to improve in 2013 as earnings sensitivities to equity markets and interest rates have diminished. In the context of low interest rates, the valuations of companies in the portfolio remain at attractive levels when measured by price to earnings ratios and current dividend yields.

PM Updates - September 2012

As of September 30, 2012, the Net Asset Value (“NAV”) of TCT.UN was $8.66 versus $8.53 on June 30, 2012. In addition, Unitholders received a distribution of $0.16088 during the quarter in accordance with the distribution policy of 7.5% per annum of the NAV of the unit.

The unit’s last trading price on September 28, 2012 was $8.63, which represents a discount of 0.35% to its underlying NAV.

North American equity markets posted strong gains in the third quarter of 2012 on expectations that both the European Central Bank (ECB) and the U.S. Federal Reserve would enter another round of quantitative easing in response to a slowing global economy.

Central Banks did not disappoint and the ECB announced in August they would soon be implementing a bond purchase program to lower borrowing costs while Ben Bernanke, Chairman of the U.S. Federal Reserve, announced a third round of quantitative easing in order to improve labour market conditions.

Unlike the previous few quarters, the S&P/TSX Composite Index outperformed the U.S. S&P 500 Index on a total return basis during the period, albeit marginally, up 7.0% and 6.4% respectively. Canadian Financials underperformed the broader market as the S&P/TSX Capped Financials Total Return Index was up 5.3% during the period.

All ten Financial stocks within the portfolio had positive returns over the period with the insurers underperforming the banks again after briefly outperforming in the first quarter of 2012. The S&P/TSX Diversified Banks Total Return Index was up 5.8% while the S&P/TSX Life and Health Insurance Total Return Index increased 5.3%. The portfolio was led by Industrial Alliance Insurance and Financial Services Inc. during the period, up 15.8% after significantly lagging the group in the first half of 2012. Meanwhile, Great-West Lifeco Inc. lagged the group during the quarter up only 2.7% after outperforming in the first half.

Canadian banks reported strong third quarter earnings that beat analyst’s estimates. All five banks within the portfolio raised their dividends by 3–7% and The Toronto-Dominion Bank increased its payout ratio to 40-50% from 35-45%. Both the Canadian Imperial Bank of Commerce and the Royal Bank of Canada also announced significant share buybacks that should provide some support for the shares.

The Canadian life insurance companies reported mixed second quarter earnings during the period as low interest rates continue to be the biggest issue. Capital concerns were alleviated during the quarter and most companies remain comfortable with their capital ratios despite regulatory headwinds.

Volatility levels for the Canadian financials remained low in the third quarter, trading in a range of 10% to 20%. The Fund had been active in its covered-call writing, with an average of 34.9% of the portfolio overwritten during the period, but ended the third quarter with no covered calls or protective puts.

The Fund maintained a high investment position during the period and ended the quarter with a cash position of 0.8% vs. 1.3% at the end of the previous quarter.

The profitability of Canadian banks and life insurance companies is likely to continue to grow at a slower pace in 2012 due to decelerating consumer loan growth, volatile capital markets and record low interest rates. In the context of low interest rates, the valuations of companies in the portfolio remain at attractive levels when measured by price to earnings ratios and current dividend yields.

PM Updates - June 2012

As of June 30, 2012, the Net Asset Value (“NAV”) of TCT.UN was $8.53 versus $9.49 on March 31, 2012. In addition, Unitholders received a distribution of $0.16331 during the quarter in accordance with the distribution policy of 7.5% per annum of the NAV of the unit.

The unit’s last trading price on June 29, 2012 was $8.63, which represents a premium of 1.17% to its underlying NAV.

After rallying in the first quarter of 2012, equity markets took a breather and corrected in the second quarter due to continued concerns regarding the European debt crisis as well as growing fears over a decelerating global economy.

Similar to the last few quarters, the S&P/TSX Composite Index underperformed the S&P 500 Index in the U.S. during the period, down 5.7% and down 2.8% respectively. Canadian Financials were down in the second quarter as the S&P/TSX Capped Financials Total Return Index decreased to 255.52 from 273.13.

All ten Financial stocks within the portfolio had negative returns over the period with the insurers underperforming the banks again after briefly outperforming in the first quarter of 2012. The S&P/TSX Diversified Banks Total Return Index was down 6.9% while the S&P/TSX Life and Health Insurance Total Return Index decreased 13.0%. The portfolio was led by the Bank of Montreal and the Bank of Nova Scotia during the period, down 4.0% and 4.6% respectively, while Industrial Alliance Insurance and Financial Services Inc. and Manulife Financial Corp. both lagged the group down 19.2% and 17.1%, due to weaker global equity markets and falling 10-year bond yields in both Canada and the U.S.

Most Canadian banks reported better than expected second quarter earnings. Canadian banks continued to show their strength relative to other nation’s banks as the World Economic Forum named the Canadian banking system the soundest for the fourth year running. The National Bank of Canada was the only bank within the portfolio to raise its dividend in the quarter, up 5.33%.

The Canadian life insurance companies reported mixed first quarter earnings as stronger equity markets were offset by continued low interest rates as well as concerns about their capital ratio. Expectations have been falling for second quarter earnings estimates due to weak equity markets and record low 10-year U.S. Treasury yields which declined by 56 basis points during the period to 1.64%.

Volatility levels for the Canadian financials remained low in the second quarter, trading in a range of 10% to 20%. The fund increased both its covered-call writing and protective put buying during the period and ended the second quarter with 57.0% of the portfolio subject to covered calls options and 28.1% of the portfolio hedged with protective put options.

The Fund maintained a high investment position during the period and ended the quarter with a cash position of 1.3% vs. 1.2% at the end of the previous quarter.

The profitability of Canadian banks and life insurance companies is likely to continue to grow at a slower pace in 2012 due to decelerating consumer loan growth, volatile capital markets and record low interest rates. In the context of record low interest rates, the valuations of companies in the portfolio remain at attractive levels when measured by price to earnings ratios and current dividend yields.

PM Updates - March 2012

As of March 31, 2012, the Net Asset Value (“NAV”) of TCT.UN was $9.49 versus $8.71 on December 31, 2011. In addition, unitholders received a distribution of $0.17231 during the quarter in accordance with the distribution policy of 7.5% per annum of the NAV of the Fund.

The unit’s last trading price on March 30, 2012 was $9.07, which represents a discount of 4.42% to its underlying NAV.

Equity markets continued to rally in the first quarter of 2012 after stabilizing and rallying into year-end 2011 on the back of better U.S. employment and housing numbers as well as reduced risk of a European sovereign default.

Similar to the fourth quarter of 2011, the S&P/TSX Composite Index underperformed the S&P 500 Index in the U.S. in the first quarter of 2012. During the period, the S&P/TSX Composite Total Return Index increased 4.4% while the S&P 500 Total Return Index increased 9.9%. Canadian Financials were the third best performing sector in Canada in the first quarter as the S&P/TSX Capped Financials Total Return Index increased to 273.13 from 245.18.

All ten Financial stocks within the portfolio had positive returns over the period with the insurers outperforming the banks after significantly underperforming in 2011. The S&P/TSX Diversified Banks Total Return Index was up 10.4% while the S&P/TSX Life and Health Insurance Total Return Index increased 22.1%. The portfolio was led by two of the laggards of 2011, Sun Life Financial Inc. and Manulife Financial Corp. which were up 27.3% and 25.8% respectively, due to stronger global equity markets and rising 10-year bond yields in both Canada and the U.S. The Bank of Montreal and Canadian Imperial Bank of Commerce lagged the group but still generated positive total returns of 7.4% and 4.5% respectively.

Canadian banks reported in-line to better than expected first quarter earnings as wholesale bounced back on better than expected trading revenues. However, loan growth continues to moderate and net interest margins are under incremental pressure in the current low interest rate environment. The Toronto-Dominion Bank, Royal Bank of Canada and the Bank of Nova Scotia all raised their dividends in the quarter by an average of 6%.

The Canadian life insurance companies reported mixed fourth quarter earnings due to weak equity markets and continued low interest rates. However, expectations have been rising for first quarter earnings estimates due to strong equity markets and rising 10-year U.S. Treasury yields which have backed up over 30 basis points since year-end to 2.21%.

Volatility continued to decline in the first quarter, reaching levels not seen since July 2011, as economic statistics in the U.S. continued to improve and concerns about European sovereign default subsided. The percent of the portfolio subject to covered calls on average during the period was 15.0% and the Fund ended the first quarter with 6.7% of the portfolio subject to covered calls.

No put protection was purchased during the quarter due to an improved outlook on the securities within the portfolio.

The Fund maintained a high investment position during the period and ended the quarter with a cash position of 1.2% vs. 2.3% at the end of 2011.

The Canadian banks and life insurance companies profitability is likely to grow at a slower pace in 2012 due to decelerating consumer loan growth, volatile capital markets and net interest margin compression. In the context of record low global interest rates, the valuations of companies in the portfolio remain at attractive levels when measured by price to earnings ratios and current dividend yields.

PM Updates - December 2011

As of December 31, 2011, the Net Asset Value (“NAV”) of TCT.UN was $8.71 versus $9.17 on September 30, 2011. In addition, the Fund paid a distribution of $0.15656 during the quarter which represents a distribution policy of 7.5% per annum on the NAV of the unit.

The unit’s last trading price on December 30, 2011 was $8.40, which represents a discount of 3.56% to its underlying NAV.

Equity markets continued their volatile ride in the fourth quarter of 2011. After correcting significantly in the 3rd quarter of 2011 due to Standard and Poor’s downgrade of U.S. Government debt and concerns about a potential sovereign default by Greece, equity markets found some footing and rallied into year-end. Although the S&P/TSX 60 Index underperformed the S&P 500 Index in the U.S. which rose 11.8% during the fourth quarter, it still managed to increase 2.8% during the period. Canadian Financials on the other hand were relatively flat during the period as the S&P/TSX Capped Financials Total Return Index increased slightly to 245.18 from 242.94.

The ten Financial stocks within the portfolio had mixed returns over the period with the banks considerably outperforming the insurers again. The S&P/TSX Diversified Banks Total Return Index was up 2.5% while the S&P/TSX Life and Health Insurance Total Return Index declined 8.6%. The portfolio was led by the Royal Bank of Canada up 9.4% on the back of better than expected fourth quarter earnings. Meanwhile, Sun Life Financial Inc. (“SLF”) dragged the life insurance group down with a negative return of 23.1%. This was due to the $500 million charge to fourth quarter income they pre-announced on October 17th due to lower equity markets and lower interest rates.

Canadian banks proved their resilience by reporting better than expected fourth quarter earnings, with the exception of the Bank of Montreal, due to better than expected net interest margins and commercial loan growth. The only stock within the portfolio to increase its dividend in the quarter was the National Bank of Canada, which raised its dividend for the third time in 2011 with a 5.6% annualized increase.

The Canadian life insurance companies reported mixed third quarter earnings due to weak equity markets and continued low interest rates. Due to the tough operating environment for life insurers, SLF announced in mid-December that they will no longer sell individual life insurance or variable annuities in the U.S.

Volatility for the fourth quarter remained high until December as economic statistics in the U.S. gradually improved and concerns about European sovereign default slowly subsided. The Fund was active in its call writing during the quarter and ended the year with 11.0% of the portfolio subject to covered calls.

The Fund also opportunistically purchased some put protection on certain individual holdings within the portfolio in the quarter due to continued concerns of European sovereign default risk increasing as well as the potential for slower than expected global growth.

The Fund maintained a high investment position during the period and ended 2011 with a cash position of 2.3% vs. 3.3% at the end of the third quarter 2011.

The Canadian banks and life insurance companies profitability is likely to grow at a slower pace in 2012 due to decelerating consumer loan growth, volatile capital markets and a low interest rate environment. In the context of record low Global interest rates, the valuations of companies in the portfolio remain at attractive levels when measured by price to earnings ratios and current dividend yields.

PM Updates - September 2011

As of September 30, 2011, the Net Asset Value (“NAV”) of TCT.UN was $9.17 versus $10.46 on June 30, 2011. In addition, Unitholders received a distribution of $0.177 during the quarter which represents a distribution policy of 7.5% per annum on the NAV of the unit.

The unit’s last trading price on September 30, 2011 was $9.08, which represents a discount of 0.98% to its underlying net asset value.

The stock market correction, which began in early March, continued with a vengeance through the third quarter as the S&P/TSX 60 Index was down more than 12% during the period. The S&P/TSX Capped Financials Total Return Index did not escape the broad market decline and decreased to 242.94 from 270.28. All ten Financial stocks within the universe were down over the period with the banks considerably outperforming the insurers. The portfolio was led by the Canadian Imperial Bank of Commerce (“CM”) and the Bank of Montreal (“BMO”) with both stocks down 2.44% and 3.26% respectively. Meanwhile, Manulife Financial Corp. (“MFC”) and Industrial Alliance Insurance and Financial Services Inc. (“IAG”) dragged the life insurance group down with negative returns of 29.36% and 22.27% respectively.

After posting weaker than expected second quarter earnings, the Canadian banks, with the exception of the Royal Bank of Canada (”RY”), proved their resilience by reporting better than expected third quarter earnings due to better than expected loan growth and capital markets revenue. Both CM and The Toronto-Dominion Bank increased their dividends during the quarter by 3.4% and 3.0% respectively.

The Canadian life insurance companies reported better than expected second quarter earnings during the period although net of one-time items, the numbers were in-line on a normalized basis. Stronger than expected group and individual life sales were offset by weak global equity markets and low long-term interest rates

Volatility levels picked up in the quarter after being relatively tame during the first half of the year. Volatility levels started to pick up in late July as the deadline for the U.S. Congress vote on the debt ceiling limit on August 2nd was approaching and has remained high since as Standard & Poor’s downgraded the rating of U.S. Government debt and the potential of Greece defaulting on their debt increased. The Fund increased the level of call writing over the quarter and ended September 30, 2011 with 22.38 percent of the portfolio subject to covered calls.

The Fund also opportunistically purchased some put protection on the iShares S&P/TSX Capped Financial Index Fund (“XFN”) as well as some individual holdings within the portfolio during the period due to continued concerns of European sovereign default risk increasing as well as the potential for slower than expected global growth .

The Fund maintained a high investment position during the period and ended the third quarter with a cash position of 3.3% vs. 1.2% at the end of the second quarter 2011.

The Canadian banks and life insurance companies profitability is likely to grow at a slower pace than was originally expected at the beginning of 2011 due to decelerating loan growth, weaker equity and capital markets along with lower interest rates and net interest margin compression. In the context of record low Global interest rates, the valuations of companies in the portfolio remain at attractive levels when measured by price to earnings ratios and current dividend yields and this should continue to act as support for the share prices.

PM Updates - June 2011

As of June 30, 2011, the NAV of TCT.UN was $10.46 versus $11.11 on March 31, 2011. In addition, Unitholders received a distribution of $0.204 during the quarter which represents a distribution policy of 7.5% per annum on the NAV of the unit.

The unit’s last trading price on June 30, 2011 was $9.95, which represents a discount of -4.88% to its underlying net asset value.

During the period The S&P/TSX Financials Total Return Index decreased to 2,447.55 from 2,514.27. The financial stocks within the universe had varying returns over the period with the insurers outperforming the banks on average. The portfolio was led by the National Bank of Canada (“NA) and Manulife Financial Corp. (“MFC”) with both stocks relatively flat over the quarter up 0.19% and 0.17% respectively. Meanwhile, the Canadian Imperial Bank of Commerce (“CM”) and the Royal Bank of Canada (“RY”) dragged the bank group down with negative returns of 7.87% and 7.34% respectively.

After posting strong earnings growth in the first quarter of 2011, Canadian banks reported weaker than expected second quarter earnings due to weak trading revenues and lower net interest margins. Capital ratios continued to increase on a year over year basis and both RY and NA increased their dividends during the quarter by 8.0% and 7.6% respectively.

The Canadian life insurance companies demonstrated improving fundamentals and profitability in the first quarter of 2011 benefitting from higher global equity markets and rising ten year bond yields in both Canada and the United States. However, second quarter results are likely to be weaker due to the headwinds of weaker equity markets and lower bond yields.

Due to the low level of volatility in the Canadian financials for the majority of the period, the covered call writing activity was opportunistic as the lower volatility did not compensate the fund enough to justify a passive call writing approach. The fund ended June 30, 2011 with approximately 12 percent of the portfolio subject to covered calls.

The fund also opportunistically purchased some put protection on the iShares S&P/TSX Capped Financials Index Fund (“XFN”) during the period due to concerns of European sovereign default risk increasing as well as the U.S. debt ceiling controversy impacting Canadian financials.

The fund maintained a high investment position during the period and ended the second quarter with a cash position of 1.2% vs. 1.4% at the end of the first quarter 2011.

The Canadian banks and life insurance companies are expected to improve their profitability and capital ratios in 2011 due to improving credit, good expense control and leverage to a slowly improving economy. In the context of record low Global interest rates, the valuations of companies in the portfolio remain at attractive levels when measured by price to earnings ratios and current dividend yields and this should continue to act as major support for the share prices.

Fund Features

Objectives

The Fund’s investment objectives are:

  • to provide Unitholders of the Fund with a stable stream of quarterly cash distributions in an amount targeted to be 7.5% per annum on the NAV of the Fund; and
  • to return the NAV per Unit as of August 2, 2005 (on a post-consolidated basis) of $15.60 to Unitholders upon termination of the Fund.

 

Investment Strategy

The Fund will seek to achieve its objectives by investing in a portfolio consisting of securities of the six largest Canadian banks and the four largest Canadian life insurance companies. The Fund will generally invest not less than 5% and not more than 15% of the Fund’s assets in each of the companies in the Financial Portfolio. In addition, the Fund may write cash covered put options and may invest up to 10% of net assets to purchase call options, both in respect of securities in which the Fund is permitted to invest.

 

Option Strategy

The Fund employs option strategies to generate additional returns above the distributions earned on its equity securities.

 

Distributions

Distributions are calculated and paid each calendar quarter based on 7.5% per annum of the net asset value of the Fund and are generally classified as a return of capital for tax purposes.

 

Redemptions

The Fund is redeemable annually in December of each year at the option of the unitholder and monthly at a discount to market price.

Click to expand Redemption Details

Redemption Deadlines
Units surrendered for redemption by a Unitholder at least five business days prior to the last day of a month (a “Valuation Date”) will be redeemed on such Valuation Date and the Unitholder will receive payment on or before the fifteenth day following such Valuation Date (the “Redemption Payment Date”). If a Unitholder makes such surrender after 5:00 p.m. (EST) on the fifth business day immediately preceding a Valuation Date, the Units will be redeemed on the Valuation Date in the following month. Redemption notices must be delivered to the Fund by an investor’s advisory form in sufficient time to meet the deadline.

Annual Redemption
Units are redeemed on the December Valuation Date in each year will be entitled to receive a redemption price per Unit equal to the NAV per Unit determined as of such Valuation Date

Monthly Redemption
For Unitholders whose Units are redeemed on any other Redemption Date, the redemption price per Unit will be equal to the lesser of:

  1. 95% of the Market Price. For such purposes, “Market Price” means the weighted average trading price of the Units on the principal stock exchange on which the Units are listed for the ten trading days immediately preceding the applicable Redemption Date, and
  2. 100% of the Closing Market Price of the Units on the applicable Redemption Date, minus an amount equal to the aggregate of all brokerage fees, commissions and other costs incurred by the Fund in connection with such payment, including, but not limited to, costs incurred in liquidating securities held in the Fund’s portfolio. For such purposes, the “Closing Market Price” means the closing price of the Units on the principal stock exchange on which the Units are listed or, if there was no trade on the relevant date, the average of the last bid and the last asking prices of the Units on the principal stock exchange on which the Units are listed.

Any unpaid distribution payable on or before the applicable Redemption Date in respect of Units tendered for redemption on such Redemption Date will also be paid on the applicable Redemption Payment Date.

 

Leverage

The Fund does not employ leverage.

 

Termination

There is no fixed termination date as units may be sold daily on the TSX or redeemed annually at net asset value per unit.

 

CUSIP ISIN

CUSIP – 89054A105
ISIN - CA 89054A1053

 

Eligibility

RRSPs, DPSPs, RRIFs, RESPs and TFSAs

 

Issuer Bid

The Fund may purchase up to 10% of its outstanding units at prices up to net asset value per unit.

 

Management Fees

The Fund pays a management fee of 1.10% of net asset value annually to Strathbridge Asset Management for acting as the Manager and the Investment Manager.

 

Service Fee

A service fee of 0.30% of NAV per unit per annum is paid quarterly to Investment Advisors.

 

MER

The Management Expense Ratio (“MER”) is the sum of all operating expenses, including management and service fees but excluding portfolio transaction costs, expressed as a percentage of average net asset value.

 

Inception Date

02/23/2000 (Restructured as TCT on August 2, 2005)

 

Manager

Strathbridge Asset Management

 

Documentation

Note:

Prior to August 2, 2005 this fund operated as Mulvihill Digital World Trust - DWT.UN. See press release of August 2, 2005 for more information.

Date:      Type:      Description
September 02, 2020 Press Release TCT: Declares Quarterly Fund Distribution
August 27, 2020 Financial Report 2020 Semi-Annual Report
August 27, 2020 Press Release TCT: Announces Semi-Annual Results
June 03, 2020 Press Release TCT: Declares Quarterly Fund Distribution
March 27, 2020 Annual Information Form Annual Information Form Top 10 Canadian Financial Trust
March 27, 2020 Financial Report 2019 Annual Report
March 27, 2020 Press Release TCT: Announces Year End Results
March 03, 2020 IRC Report IRC Report for Top 10 Canadian Financial Trust
March 03, 2020 Press Release TCT: Declares Quarterly Fund Distribution
December 04, 2019 Press Release TCT: Declares Quarterly Fund Distribution
September 04, 2019 Press Release TCT: Declares Quarterly Fund Distribution
August 28, 2019 Financial Report 2019 Semi-Annual Report
August 28, 2019 Press Release TCT: Announces Semi-Annual Results
June 04, 2019 Press Release TCT: Declares Quarterly Fund Distribution
March 21, 2019 Annual Information Form Annual Information Form Top 10 Canadian Financial Trust
March 21, 2019 Financial Report 2018 Annual Report
March 21, 2019 Press Release TCT: Announces Year End Results
March 05, 2019 Press Release TCT: Declares Quarterly Fund Distribution
December 04, 2018 Press Release TCT: Declares Quarterly Fund Distribution
September 04, 2018 Press Release TCT: Declares Quarterly Fund Distribution
August 24, 2018 Financial Report 2018 Semi-Annual Report
August 24, 2018 Press Release TCT: Announces Semi-Annual Results
June 04, 2018 Press Release TCT: Declares Quarterly Fund Distribution
March 29, 2018 Annual Information Form Annual Information Form Top 10 Canadian Financial Trust
March 22, 2018 Financial Report 2017 Annual Report
March 22, 2018 Press Release TCT: Announces Year End Results
March 02, 2018 Press Release TCT: Declares Quarterly Fund Distribution
December 05, 2017 Press Release TCT: Declares Quarterly Fund Distribution
September 05, 2017 Press Release TCT: Declares Quarterly Fund Distribution
August 28, 2017 Financial Report 2017 Semi-Annual Report
August 28, 2017 Press Release TCT: Announces Semi-Annual Results
May 29, 2017 Press Release TCT: Declares Quarterly Fund Distribution
March 31, 2017 Annual Information Form Annual Information Form Top 10 Canadian Financial Trust
March 22, 2017 Financial Report 2016 Annual Report
March 22, 2017 Press Release TCT: Announces Annual Results
March 06, 2017 Press Release TCT: Declares Quarterly Fund Distribution
December 05, 2016 Press Release TCT: Declares Quarterly Distribution
September 06, 2016 Press Release TCT: Declares Quarterly Fund Distribution
August 23, 2016 Financial Report 2016 Semi-Annual Report
August 23, 2016 Press Release TCT: Announces Semi-Annual Results
June 01, 2016 Press Release TCT: Declares Fund Distribution
March 30, 2016 Annual Information Form Annual Information Form Top 10 Canadian Financial Trust
March 23, 2016 Financial Report 2015 Annual Report
March 23, 2016 Press Release TCT: Announces Year End Results
March 07, 2016 Press Release TCT: Declares Quarterly Fund Distribution
December 03, 2015 Press Release TCT: Declares Quarterly Fund Distribution
September 03, 2015 Press Release TCT: Declares Quarterly Fund Distribution
August 21, 2015 Financial Report 2015 Semi-Annual Report
August 21, 2015 Press Release TCT: Announces Semi-Annual Results
June 03, 2015 Press Release TCT: Declares Quarterly Fund Distribution
March 31, 2015 Annual Information Form Annual Information Form Top 10 Canadian Financial Trust
March 26, 2015 Financial Report 2014 Annual Report
March 26, 2015 Press Release TCT: Announces Year End Results
March 04, 2015 Press Release TCT: Declares Quarterly Fund Distribution
January 02, 2015 Press Release Strathbridge Announces Securityholder Approval of Proposal
December 03, 2014 Press Release TCT: Quarterly Fund Distribution
December 02, 2014 Prospectus Joint Information Circular
November 12, 2014 Press Release Strathbridge Announces Special Meeting
October 17, 2014 Press Release TCT: Announces Normal Course Issuer Bid
September 03, 2014 Press Release TCT: Declares Quarterly Fund Distribution
August 28, 2014 Financial Report 2014 Semi-Annual Report
August 28, 2014 Press Release TCT: Announces Semi-Annual Results
June 03, 2014 Press Release TCT: Declares Quarterly Fund Distribution
March 31, 2014 Annual Information Form Annual Information Form Top 10 Canadian Financial Trust
March 21, 2014 Financial Report 2013 Annual Report
March 21, 2014 Press Release TCT: Announces Year End Results
March 04, 2014 Press Release TCT: Declares Quarterly Fund Distirbution
December 04, 2013 Press Release TCT: Quarterly Fund Distribution
September 03, 2013 Press Release TCT: Quarterly Fund Distributions
August 16, 2013 Financial Report 2013 Semi-Annual Report
August 16, 2013 Press Release TCT: Announces Semi-Annual Results
June 03, 2013 Press Release TCT: Declares Quarterly Fund Distributions
April 29, 2013 Press Release TCT: Announces Normal Course Issuer Bid
March 28, 2013 Annual Information Form Annual Information Form Top 10 Canadian Financial Trust
March 27, 2013 Financial Report 2012 Annual Report
March 27, 2013 Press Release TCT: Announces Year End Results
March 05, 2013 Press Release TCT: Declares Quarterly Fund Distributions
November 30, 2012 Press Release TCT: Quarterly Fund Distribution
September 04, 2012 Press Release TCT: Quarterly Fund Distributions
August 16, 2012 Financial Report 2012 Semi-Annual Report
August 16, 2012 Press Release TCT: Announces Semi-Annual Results
June 04, 2012 Press Release TCT: Quarterly Fund Distributions
March 30, 2012 Annual Information Form Annual Information Form Top 10 Canadian Financial Trust
March 23, 2012 Financial Report 2011 Annual Report
March 23, 2012 Press Release TCT: Announces Year End Results
February 27, 2012 Press Release TCT: Declares Quarterly Fund Distributions
November 30, 2011 Press Release TCT: Declares Quarterly Disitribution
October 03, 2011 Press Release Mulvihill Capital Management Inc. Proudly Announces a Name Change to Strathbridge Asset Management Inc.
August 30, 2011 Press Release TCT: Declares Quarterly Disitribution
August 22, 2011 Financial Report 2011 Semi-Annual Report
August 22, 2011 Press Release TCT: Announces Semi-Annual Results
July 13, 2011 Press Release TCT: Announces Normal Course Issuer Bid
June 02, 2011 Press Release TCT: Declares Quarterly Fund Distributions
March 29, 2011 Financial Report 2010 Annual Report
March 29, 2011 Press Release TCT: Announces Year End Results
March 02, 2011 Press Release TCT: Declares Quarterly Fund Distribution
December 06, 2010 Press Release TCT: Announces Unitholder Approval of Proposal to Extend Scheduled Termination Date
December 02, 2010 Press Release TCT: Declares Fund Distributions
November 12, 2010 Press Release TCT: Announces Proposal to Extend Scheduled Redemption Date
November 12, 2010 Press Release TCT: Notice of Special Meeting of Shareholders and Management Information Circular
October 29, 2010 Prospectus Management Information Circular (English)
September 01, 2010 Press Release TCT: Declares Fund Distribution
August 20, 2010 Financial Report 2010 Semi-Annual Report
August 20, 2010 Press Release TCT: Announces Semi-Annual Results
June 21, 2010 Press Release TCT: Announces Closing of Warrant Offering
June 08, 2010 Press Release TCT: Announces Normal Course Issuer Bid
June 02, 2010 Press Release TCT: Declares Quarterly Distribution
March 26, 2010 Press Release TCT: Announces Year End Results
March 25, 2010 Financial Report 2009 Annual Report
March 02, 2010 Press Release TCT: Declares Quarterly Distribution
December 03, 2009 Press Release TCT: Declares Quarterly Distribution
November 23, 2009 Press Release TCT: Issues Warrants
November 11, 2009 Press Release TCT: Files Final Prospectus for Warrant Offering
November 10, 2009 Press Release TCT: Prospectus Simplifié - Placement de bons de souscription
November 10, 2009 Press Release TCT: Short Form Prospectus - Warrant Offering
November 06, 2009 Prospectus Warrant Offering Short Form Prospectus (English)
November 06, 2009 Prospectus Warrant Offering Short Form Prospectus (French)
October 09, 2009 Press Release TCT: Proposed Warrant Offering
September 02, 2009 Press Release TCT: Declares Quarterly Distribution
August 26, 2009 Press Release TCT: Announces Semi-Annual Results
August 25, 2009 Financial Report 2009 Semi-Annual Report
June 03, 2009 Press Release TCT: Declares Quarterly Distribution
March 27, 2009 Financial Report 2008 Annual Report
March 27, 2009 Press Release TCT: Announces Year End Results
March 03, 2009 Press Release TCT: Declares Quarterly Distribution
December 04, 2008 Press Release TCT: Declares Quarterly Distribution
September 03, 2008 Press Release TCT: Declares Quarterly Distribution
August 28, 2008 Financial Report 2008 Semi-Annual Report
August 28, 2008 Press Release TCT: Announces Semi-Annual results
May 26, 2008 Press Release TCT: Declares Quarterly Distribution
May 07, 2008 Press Release TCT: Announces Normal Course Issuer Bid
March 25, 2008 Financial Report 2007 Annual Report
March 25, 2008 Press Release TCT: Announces Year End Results
March 06, 2008 Press Release TCT: Declares Quarterly Distribution
December 05, 2007 Press Release TCT: Declares Quarterly Distribution
September 06, 2007 Press Release TCT: Declares Quarterly Distribution
August 24, 2007 Financial Report 2007 Semi-Annual Report
August 24, 2007 Press Release TCT: Announces Semi-Annual Results
June 05, 2007 Press Release TCT: Declares Quarterly Distribution
May 07, 2007 Press Release TCT: Announces Normal Course Issuer Bid
March 27, 2007 Financial Report 2006 Annual Report
March 27, 2007 Press Release TCT: Announces Year End Results
March 01, 2007 Press Release TCT: Declares Quarterly Distribution
December 05, 2006 Press Release TCT: Declares Quarterly Distribution
September 05, 2006 Press Release TCT: Declares Quarterly Distribution
August 25, 2006 Financial Report Semi-Annual Report 2006
August 25, 2006 Press Release TCT: Announces Semi-Annual Results
June 06, 2006 Press Release TCT: Declares Quarterly Distribution
May 05, 2006 Press Release TCT: Announces Normal Course Issuer Bid
April 28, 2006 Financial Report 2005 Annual Report
April 28, 2006 Press Release TCT: Announces Year End Results
March 02, 2006 Press Release TCT: Declares Quarterly Distribution
December 05, 2005 Press Release TCT: Declares Quarterly Distribution
October 28, 2005 Press Release TCT: Issuance of Units
October 18, 2005 Press Release TCT: Completes Follow-on Offering of Units
September 28, 2005 Prospectus Follow-on Prospectus (English)
September 28, 2005 Prospectus Follow-on Prospectus (French)
September 01, 2005 Press Release TCT: Declares Quarterly Distribution
August 24, 2005 Financial Report TCT: 2005 Semi-Annual Report
August 24, 2005 Press Release TCT: Announces Semi-Annual Results
August 24, 2005 Press Release TCT: Preliminary Prospectus Filed for Follow-on Offering
August 02, 2005 Press Release DWT: Announces Unitholder Approval of Proposal
July 07, 2005 Press Release DWT: Notice of Special Meeting of Unitholders and Management Information Circular
July 07, 2005 Prospectus Management Information Circular (English)
June 28, 2005 Press Release DWT: Announces Proposal
June 01, 2005 Press Release DWT: Declares Quarterly Distribution
April 26, 2005 Press Release DWT: Announces Normal Course Issuer Bid
March 30, 2005 Financial Report DWT: 2004 Annual Report
March 30, 2005 Press Release DWT: Announces Year End Results
March 02, 2005 Press Release DWT: Declares Quarterly Distribution
December 02, 2004 Press Release DWT: Declares Quarterly Distribution
September 02, 2004 Press Release DWT: Declares Quarterly Distribution
August 13, 2004 Financial Report DWT: 2004 Semi - Annual Report
August 13, 2004 Press Release DWT: Announces Semi Annual Results
June 03, 2004 Press Release DWT: Declares Quarterly Distribution
April 26, 2004 Press Release DWT: Announces Normal Course Issuer Bid
March 26, 2004 Press Release DWT: Annual Results - 2003
March 25, 2004 Financial Report DWT: 2003 Annual Report
March 01, 2004 Press Release DWT: Declares Quarterly Distribution
December 03, 2003 Press Release DWT: Declares Quarterly Distribution
September 03, 2003 Press Release DWT: Declares Quarterly Distribution
August 22, 2003 Financial Report DWT: 2003 Semi - Annual Report
August 22, 2003 Press Release DWT: Announces Semi-Annual Results
June 04, 2003 Press Release DWT: Declares Quarterly Distribution
April 25, 2003 Press Release DWT: Announces Normal Course Issuer Bid
April 01, 2003 Financial Report DWT: 2002 Annual Report
March 31, 2003 Press Release DWT: Announces Year End Results
March 03, 2003 Press Release DWT: Declares Quarterly Distribution
December 04, 2002 Press Release DWT: Declares Year End Distribution
September 19, 2002 Press Release DWT: Declares Quarterly Distribution
August 26, 2002 Financial Report DWT: 2002 Semi - Annual Report
August 26, 2002 Press Release DWT: Announces Semi-Annual Results
June 17, 2002 Press Release DWT: Declares Quarterly Distribution
April 09, 2002 Financial Report DWT: 2001 Annual Report
April 02, 2002 Press Release DWT: Announces Year End Results
March 19, 2002 Press Release DWT: Declares Quarterly Distribution
December 18, 2001 Press Release Mulvihill Capital Management Declares Year End Distributions for Thirteen Investment Portfolios
December 17, 2001 Press Release DWT: Declares Year End Distribution
September 17, 2001 Press Release DWT: Declares Quarterly Income Distribution
September 05, 2001 Financial Report DWT: 2001 Semi - Annual Report
September 04, 2001 Press Release DWT: Announces Semi-Annual Results
June 19, 2001 Press Release DWT: Declares Quarterly Income Distribution
May 07, 2001 Financial Report DWT: 2000 Annual Report
May 07, 2001 Press Release DWT: Year End Financial Results
March 15, 2001 Press Release DWT: Declares Quarterly Income Distribution
December 15, 2000 Press Release DWT: Declares Year End Income Distribution
December 15, 2000 Press Release Mulvihill Capital Management Declares Special and Quarterly Income Distributions for Ten Investment Portfolios
September 11, 2000 Financial Report DWT: 2000 Semi - Annual Report
September 05, 2000 Press Release DWT: Declares Quarterly Income Distribution
September 05, 2000 Press Release Mulvihill Capital Management Declares Special and Quarterly Income Distributions for Eight Investment Portfolios
August 31, 2000 Press Release DWT Announces Semi-Annual Results
June 05, 2000 Press Release DWT: Declares Quarterly Income Distribution
June 05, 2000 Press Release Mulvihill Capital Management: Declares Special and Quarterly Income Distributions for Eight Investment Portfolios
March 22, 2000 Press Release DWT: Declares Initial Quarterly Income Distributions
February 15, 2000 Prospectus Initial Public Offering Prospectus (English)
February 15, 2000 Prospectus Initial Public Offering Prospectus (French)

Administration & Governance

Introduction

Strathbridge Asset Management serves as the Manager and the Investment Manager of the Fund.

 

Manager

The Manager is responsible for providing or arranging for the provision of administrative services to the Fund including but not limited to:

  • authorizing the payment of operating expenses incurred on behalf of the Fund,
  • preparing financial statements and other accounting information,
  • ensuring that unitholders are provided with annual and semi-annual reports and other reports as required by applicable law;
  • ensuring the Fund complies with regulatory requirements and applicable stock exchange listing requirements;
  • providing the Trustee with information and reports as required;
  • calculating and arranging for the payment of distributions;
  • negotiating any contractual agreements with third-party providers of services to the Fund, including auditors, printers, registrar and transfer agent
  • Overseeing and paying monthly and annual redemptions;
  • Managing the issuer bid;
  • Maintaining the website and ongoing communication with investors.

The Management fee payable to the Manager includes any amount payable to the Investment Manager.

 

Investment Manager

The Investment Manager is responsible for making all investment decisions and managing the call option writing program in accordance with the investment objectives, strategies and restrictions of the Fund. Fees for the provision of investment management services are included in the management fee.

The Investment Manager has an asset mix committee consisting of senior members of the firm. The investment process for the Fund begins at the asset mix committee. Members of this committee meet monthly to examine macro-economic variables and relationships among dominant economic factors. This process culminates in an outlook for the various capital markets around the world and provides the Fundamental basis for Strathbridge’s long-term market outlook. These views are integrated into the investment decision making process at the portfolio management level. The asset mix committee of Strathbridge oversees investment decisions made by the portfolio managers of the Fund.

 

Independent Review Committee

The Fund has established an Independent Review Committee (“IRC”) in accordance with National Instrument 81-107 – Independent Review Committee for Investment Funds (“NI 81-107”) which is comprised of three members who are independent of the Manager. The mandate of the IRC is to review and provide its decisions to the Manager regarding any conflict of interest matters relating to its management of the Fund that the Manager has identified and brought to the committee.

A conflict of interest matter is a situation where a reasonable person would consider the Manager or an entity related to it to have an interest that may conflict with the Manager’s ability to act in good faith and in the best interests of the Funds and Securityholders. Click here for the IRC Report to Securityholders.

Click here to review members of the IRC.

 

Advisory Board

The Fund has established an Advisory Board to assist the Fund in the provision of services by the Manager and the Investment Manager and to provide oversight of these activities. The Advisory Board consists of five members, three of whom are independent of the Manager and Investment Manager. The three independent members of the Advisory Board are also members of the Independent Review Committee. The Advisory Board includes an audit committee whose mandate is to review the annual and semi-annual financial statements and discuss any issues with the auditors.

 

Trustee and Custodian

RBC Investor & Treasury Services

 

Registrar and Transfer Agent

Computershare Investor Services Inc.

 

Legal Counsel

Osler Hoskin & Harcourt LLP

 

Auditors

Deloitte & Touche LLP

Financial & Regulatory

The Annual Report and the Interim Report include the Management Report on Fund Performance and the Financial Statements of the Fund.

Report Year:      Release Date Description
2020 August 27, 2020 2020 Semi-Annual Report

 

The Annual Information Form (“AIF”) is a regulatory filing that provides material information to investors about the Fund’s structure, operations, risks and other factors that may affect the Fund. The AIF is supplemented throughout the year by other filings including press releases, information circulars, prospectuses, material change reports, the annual and interim management report on fund performance and the financial statements.

Date Description
March 27, 2020 Annual Information Form

 

The Fund has adopted the proxy voting guidelines with respect to the voting of proxies received by it relating to voting securities held by the Fund. The proxy guidelines establish standing policies and procedures for dealing with routine matters, as well as circumstances where deviations may occur from such standing policies. Click here for proxy guidelines.

The Fund has retained ISS Governance Services to administer and implement the proxy guidelines for the Fund. Click here to review the proxy voting record.