# What is the difference between DFN.PR.A and DF.PR.A



## gibor365 (Apr 1, 2011)

Could you explain me what is the difference between DFN.PR.A and DF.PR.A? Both have exactly same holdings and both have termination date Dec 1, 2019. Just wanted to place limit buy for my fixed-income allocation portion and got confused....


----------



## andrewf (Mar 1, 2010)

Looks like they are different funds. DFN-A is series I, DF-A is series II.

If you look at their website, they are two different funds:

http://www.quadravest.com/#!dividend-15-landing/c17vg


----------



## gibor365 (Apr 1, 2011)

FYI, got answer from Quadravest


> DFN.PR.A and DF.PR.A Preferred shares have the same objectives, the same core holdings, are managed the same and have the same windup date of December 1, 2019.
> 
> (a) to provide holders of the Preferred Shares with fixed cumulative preferential monthly cash dividends currently in the amount of $0.04375 per Preferred Share (representing a yield of 5.25% per annum based upon the original issue price of the Preferred Shares under the Initial Prospectus); and (b) on or about the Termination Date, to pay holders of the Preferred Shares $10.00 per Preferred Share, which was the issue price thereof under the Initial Prospectus, through the redemption of each Preferred Share held on the Termination Date.
> 
> ...


----------



## gibor365 (Apr 1, 2011)

also


> It is an “objective” of the Companies (not a guarantee) to return the $10 per value. If the NAVs decline below $10, you could receive less than $10. The NAVs are of course directly impacted by movements in the underlying common stock held in the portfolios as well as monthly distributions paid, options written on the portfolios as well as fees and expenses paid out monthly.
> 
> To protect the portfolios from eroding, please keep in mind that if the NAVs are not greater than $15 mid-month, a distribution would not be paid to the Class A shares.


Noe DFN.PR.A NAV is around $19.75 ... looks like a reasonable risk for 5+% yield


----------



## andrewf (Mar 1, 2010)

Sure. Just keep in mind that these can and do have big draw downs. Look at the chart for 2008.


----------



## gibor365 (Apr 1, 2011)

andrewf said:


> Sure. Just keep in mind that these can and do have big draw downs. Look at the chart for 2008.


Sure it can  than it dropped about 30% and XIC about 50% .... also DFN.PR.A didn't cut dividends, I undestand that NAV was still above $15, interesting what was NAV then....


----------



## andrewf (Mar 1, 2010)

It's a liquidity issue. More people wanted to sell the pref shares than those interested in buying at the time, and the number of shares is fixed in the short term (unlike with ETFs). Any closed end fund will tend to exhibit that effect.

My point is, if you are thinking you can hold this as a 'fixed income' asset that you can sell and use to buy equities when they are cheap (such as during panics like 2008/09), they are unfortunately less liquid and will tend to trade at big discounts to NAV. A bond ETF would behave much differently.


----------



## gibor365 (Apr 1, 2011)

andrew, just curious, do you hold any prefs?


----------



## andrewf (Mar 1, 2010)

No. I don't have any fixed income in my non-reg accounts. I have a pretty small fixed income allocation anyway, because I am still fairly young.


----------



## gibor365 (Apr 1, 2011)

I'm not too young... so I have some fixed-income: GIC, ATL5000, short term bonds ETF, HFR.... for diversification planning to get some DFN.PR.A


----------



## Eclectic12 (Oct 20, 2010)

gibor said:


> Could you explain me what is the difference between DFN.PR.A and DF.PR.A? Both have exactly same holdings and both have termination date Dec 1, 2019 ...


They must have synchronized the dates ... when I owned one of them, there was something like a three year difference in the expiry. For fictional example, where DFN.PR.A would expire Dec 1st, 2019, the other would expire in Sept 22nd, 2022.


If they've synced the expiry dates, I'm not sure why they wouldn't merge the funds. At the time, the objectives/stock selection/restrictions were the same for both, it was the launch/expiry dates that differed.


Cheers


----------

