In this Brompton Funds review, we’ll go over the investment provider’s background plus the investment options it offers. In particular, we’ll look into the features and terms of the funds from the firm.
Established in 2000, Brompton Funds is an arm of the Brompton Group that specializes in providing an array of investment options catered to tax-efficient, industry-specific, income, and growth targets. The company specializes in offering alternative investments, mostly to individual Canadian investors.
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Brompton Funds Background
Renowned for its strong track record of performance, Brompton offers investment opportunities that are designed to provide long-term value and regular income in a variety of interest rate environments.
Brompton Funds charges low management costs and integrates Environmental, Social, and Governance (ESG) considerations as it chooses securities.
Brompton Funds Investment Options
Investment choices offered by Brompton Funds include exchange-traded funds (ETFs), split share funds, and other investment funds that are traded on the Toronto Stock Exchange.
While Brompton employs active asset allocation and careful fund choice, it’s crucial to remember that these products might not provide a steady source of income. Investors might not get their full investment back when selling them.
Brompton ETFs
Brompton Global Dividend Growth ETF
Investors may be able to enjoy both the possibility of capital appreciation and large monthly income with this ETF. It accomplishes this by making investments in a carefully chosen portfolio of actively managed large-cap worldwide dividend growth firms.
Because this ETF is currency hedged against Canadian dollars, investors can reduce currency risk and enjoy a more stable investing environment. Its net asset value (NAV) is $19.61 and it was launched on October 17, 2018, with a distribution rate of 6.7%. It runs with a 0.75% annual management fee and has total assets of $85 million.
The Brompton Global Dividend Growth ETF logged 21.7% in the past year, while the average return over the last five years was 6.9%. The ETF has also demonstrated continuous growth potential, as seen by its average annual return of 6.3% since inception.
Brompton North American Financials Dividend ETF
By placing money in an actively managed portfolio of large-cap financial services firms listed in North America, this ETF provides investors with both monthly payouts and the possibility of capital gain.
According to Brompton Funds, banking companies based in North America have attractive prices and strong dividend growth prospects.
This is offered in USD and CAD Hedged versions that were respectively rolled out on October 17, 2018, and August 8, 2019. The NAV for CAD Hedged is currently $20.20, while that for USD is $21.90.
In addition to having $48 million in total assets, the ETF has a 5.9% distribution rate.
There is an annual management fee of 0.75%.
The CAD Hedged ETF variant has logged a one-year performance of 8.8% and a five-year performance of 6.4%. Meanwhile, the one in USD has recorded 9.7% over three years and 4.0% over the past year.
Brompton North American Low Volatility Dividend ETF
The ETF focuses on investing in a select large-cap equity securities from NA in an effort to reduce overall portfolio volatility. CAD serves as its hedge.
The fund commenced on April 30, 2020. Currently, its NAV is $22.26 and the distribution rate is 4.6%. It has $9 million in total assets under management. A 0.55% annual management fee is levied.
The Brompton North American Low Volatility Dividend ETF has returned 7.1% since its launch and 7.7% during the last 12 months.
Brompton Enhanced Multi-Asset Income ETF
Investing in a leveraged portfolio of Brompton Equity and Fixed Income funds is what the ETF is intended to provide investors with. In order to create a single ETF, this Brompton Funds investment combines a variety of investing techniques from various industries, asset classes, and geographical areas.
Notably, it is the first upgraded multi-asset ETF in Canada and is available in CAD with no management charge. Its total assets currently stand at $69 million, with NAV of $13.14. The fund launched on October 18, 2022 has a 9.5% distribution rate. The returns reached 16.7% in the last year and 18.2% since its launch.
Brompton Sustainable Real Assets Dividend ETF
Investing in a dynamically managed portfolio of global real assets companies is the goal of this Brompton Funds ETF, which primarily targets the real estate, utilities, infrastructure, and resources sectors.
Brompton Funds believes real assets’ diverse stocks have the potential to produce higher risk-adjusted returns than more focused strategies that focus on certain industries, such as infrastructure, real estate, or utilities.
Real asset firms usually enjoy continuous dividend payments and stable cash flows due to their constant revenue streams.
The ETF has performed at an 11% annual rate over the last year, while its returns since rollout have been 9%.
Brompton European Dividend Growth ETF
The fund invests in large cap dividend growth firms in Europe, which Brompton Funds reckons have great valuation as they trailed peers in the US.
The fund, unveiled July 21, 2017, is hedged to CAD. The NAV is $10.08, while the distribution rate is 5.5%.
Brompton European Dividend Growth ETF has $21 million worth of assets. A management fee of 0.75% per year is assessed.
The fund hit 13.1% in returns in the last 12 months, 7.6% in the past 5 years, and 6.1% from launch.
Brompton Global Healthcare Income & Growth ETF
The ETF has investments in international healthcare firms with large cap. This is available in USD and hedged CAD forms respectively rolled out Aug. 8, 2019 and Sept. 24, 2015. The USD variant has an NAV of $9.24 and distribution rate of 7.1%, while the CAD version has $8.69 NAV and 7.6% rate.
The fund holds assets worth $55 million and levies a 0.75% yearly management fee.
In terms of performance, Brompton Global Healthcare Income & Growth ETF (CAD hedged) logged respective returns of 12.8% and 4.6% over the last 12 months and three years. Meanwhile, the USD version recorded 13.5% in the last year and 4.8% over 3 years.
Brompton Tech Leaders Income ETF
This option invests in big tech companies centered on AI and 5G, which seeks high income per month combined with the possibility of capital growth.
The ETF was respectively released on May 20, 2011 and Aug. 8, 2019 in hedged CAD and USD varieties. While the CAD version has a $23.61 NAV and a 5.9% rate of distribution, the USD version has $25.54 and 5.7%.
An aggregate $129 million worth of assets are held in Brompton Tech Leaders Income ETF. The management fee is 0.75% per annum.
Over the past five years and 12 months, the Brompton Tech Leaders Income ETF (CAD Hedged) has returned 20.2% and 52.7%, respectively. In the meantime, the USD version saw 54.1% last year and 14.7% during the previous three years.
Brompton Flaherty & Crumrine Enhanced Investment Grade Preferred ETF
The goals of this ETF are to maintain a steady NAV and consistent monthly cash payments. Trust and corporate preferred securities denominated in US dollars, plus other corporate debt make up the majority of the actively managed portfolio in which the ETF invests.
Comparing the ETF to traditional fixed income investments, low borrowing costs and good current yields on US preferred securities enable it to provide a higher amount of income.
The Brompton Flaherty & Crumrine Enhanced Investment Grade Preferred ETF are denominated in CAD and USD, established on December 15, 2004 and February 4, 2022. The CAD version’s NAV is $8.92 and distribution rate is 9.4%, whereas the USD version’s is $9.25 and 8.7%. This ETF has $88 million in total assets under management. For both variants, the annual management fee is 1.0% of the NAV.
The CAD version has attained 2.6% over the last five years and 4.4% over the last year. The USD fund has realized 5.1% over the past12 months.
Brompton Flaherty & Crumrine Investment Grade Preferred ETF
The assets held by this fund are the same as the Enhanced Investment Grade (as discussed above). This is available as CAD hedged and USD.
The CAD was kicked off on October 15, 2018, while the USD fund debuted on August 8, 2019. The NAV is $22.26 for CAD or $22.07 for USD; the distribution rate is 6.0% for USD and 5.9% for CAD.
The Brompton Flaherty & Crumrine Investment Grade Preferred ETF has $158 million in AUM. The management charge is 0.75% too.
The CAD hedged version has gained 3.0% over the last five years and 4.6% during the last year. Conversely, the USD version has earned 5.0% over the last year but lost 0.2% in the previous three years.
Brompton Split Corp. Preferred Share ETF
Investing in preferred shares from Canadian split share firms listed on a Canadian market, the Preferred Share ETF is designed to protect capital and is structured to provide monthly payments. Monthly tax savings may be available to investors due to the tax-advantaged payouts from this exchange-traded fund.
In order to provide cost-effective fund management, this ETF’s management fee is fixed at 0.50% of its NAV annually. Founded on June 12, 2023, the ETF has a 6.4% payout rate, a $10.35 NAV, and is valued in Canadian dollars.
The ETFs listed are for investors who can handle return volatility, want to preserve their dividend income, and want exposure to preferred shares. Through covered call techniques, it targets investors who are comfortable with equity risk and who want consistent cash dividends per month, increased income, and lesser volatility. It also works well for people looking for risk-adjusted returns and diversified investment options.
Brompton TSX Traded Funds
Canadian High Income Equity Fund
With a focus on dividend-paying stocks, this product primarily invests in a set of high-income Canadian common equities.
Furthermore, the fund has the option to commit a portion of its holdings to investments in fixed income.
The CAD-valued fund commenced on Feb. 18, 2010. The distribution rate is 7.3%, NAV $6.87, and assets held $7 million. It has an annual management fee of 1.25% charged against the NAV.
The fund produced a 4.6% return during the previous five years, but performance over the last year was merely 0.1%.
Blue Ribbon Income Fund
This Brompton Funds option makes investments in Canadian equities that pay dividends, making up the majority of its high income equity portfolio. The fund has a net asset value of $8.02 and has been operating since September 16, 1997. This fund has a distribution rate of 6.1%.
The fund has $69 million in total assets under administration, with an annual management fee of 1.00%.
The Blue Ribbon Income Fund has returned 4.3% in a single year, 5.5% in five, and 8.7% overall from launch.
Symphony Floating Rate Senior Loan Fund
Investing in a diversified portfolio of short-duration floating rate senior corporate instruments—mostly senior loans and other senior debt obligations from non-investment grade corporate borrowers in North America—was the main goal of the establishment of the Fund.
By giving senior loans, which are secured by the issuer’s assets, priority for repayment, this Brompton Funds product seeks to offer a high degree of capital preservation. Because senior loans have variable rate coupons, the fund also offers low interest rate risk, shielding investors’ capital during periods of rising interest rates.
The fund is available in two classes, Class A with a net asset value of $6.93 and Class U with an NAV of $6.79, denominated in Canadian Dollar and USD respectively.
The inception date of the fund is November 1, 2011, with total assets under management amounting to $80 million. The management fee for this fund is set at 1.25% per annum.
Split Share Class A and Preferred Shares Investments
Dividend Growth Split Corp.
This option consists of a portfolio of Canadian shares which concentrates on large-cap corp. with high dividend yields and solid dividend growth rates. It offers preferred shareholders with cumulative preferential quarterly cash payments.
In addition, Class A share owners can witness capital growth and receive consistent monthly cash earnings. The Class A NAV, expressed in CAD, is $5.58; the preferred NAV is $10. Class A and Preferred shares have respective distribution rates of 21.1% and 5.5%.
The fund was established on December 3, 2007, and has since grown to manage total assets of $686 million. The management fee for the fund is 0.60% per year. The fund has a maturity date of September 27, 2024.
The Class A shares have a one-year return of 26.4% and a five-year return of 15.9% since the fund’s inception, while the Preferred shares have a five-year return of 5.6%.
Brompton Energy Split Corp.
The investment fund focuses on building a portfolio primarily composed of equity securities from global energy companies that pay dividends. Moreover, the fund may strategically engage in writing covered-call options at times to boost overall returns and manage the portfolio’s volatility effectively.
The Class A shares of the Brompton Funds fund have a net asset value of $3.59, while the preferred shares are valued at $10.13. The distribution rate for the Class A shares is not applicable, while the preferred shares offer a distribution rate of 7.7%.
The fund operates in Canadian Dollars and was established on February 24, 2015, with total assets amounting to $11 million. The management fee for this fund is set at 0.70% yearly, ensuring professional oversight and strategic management of the fund’s assets.
Brompton Energy Split Corp. is set to mature on March 28, 2025.
The Class A shares have shown a 1-year return of 3.6%, a 5-year return of 17.8%, and a loss since initiation of -10.9%. The Preferred shares have delivered returns of 8.1%, 7.8%, and 6.6% over the same respective time frames.
Global Dividend Growth Split Corp.
The investment targets equity securities from large cap international companies known for their consistent dividend increase. The Class A shares have a $9.43 NAV, while the Preferred shares are valued at $10.08. The distribution rate for Class A shares is 12.5%, and for Preferred shares is 5.1%.
The CAD-denominated fund was established on June 15, 2018, with total assets now amounting to $310 million. The management fee is set at 0.85% each year. The Brompton Funds investment is due June 30, 2026.
The Class A shares logged a 1-year return of 42.4%, a 5-year return of 11.3%, and a return of 9.8% since its start. Meanwhile, the Preferred shares have maintained a consistent performance with a 5.1% return across various periods.
Life & Banc Split Corp.
The portfolio is diversified, with the so-called Big Six banks and the four biggest publicly traded life insurance companies in Canada receiving similar proportion of the total investment.
The NAV of the company’s Class A shares is $7.26, with a 15.5% dividend rate; the preferred shares have a $10.12 NAV with a 7.1% payout rate. The CAD investment has a total asset value of $727 million. The annual management fee is 0.60%. The investments are scheduled to mature on October 30, 2028.
Brompton Lifeco Split Corp.
The investment fund focuses on equal investments in common shares of Canada’s four largest publicly listed life insurance companies. This is available in Canadian Dollars, and was established on April 18, 2007.
For the Class A shares, the net asset value is $6.88, while for the Preferred shares, it is $10.05. The distribution rate for the A shares is 13.6%, and for the Preferred shares is 6.2%. The aggregate assets under this fund are $139 million, with annual management fee at 0.60% of NAV. This fund matures on April 27, 2029.
The Class A shares hit a one-year return of 23.1% and a five-year return of 20.5%. Since its debut, the Class A shares have delivered a profit of 3.7%. The Preferred shares have also performed well, with a one-year and five-year earnings of 6.4% and 5.8%, respectively.
Sustainable Power & Infrastructure Split Corp.
The CAD-denominated investment specifically targets sustainable power and infrastructure sectors.
The fund offers both Class A and Preferred shares, with a net asset value of $7.35 and rate of distribution of 11.9% for the former and $10.08 and 5.0% for the latter.
This option, rolled out May 21, 2021, has total AUM of $62 million. The annual management cost for this is set at 0.75%. It will mature on May 29, 2026.
When it comes to Class A shares performance, the Sustainable Power & Infrastructure Split Corp. gathered a one-year profit of 33.8% and 2.2% since formation. The Preferred shares recorded a yield of 5.1% for the 12-month period and since launch.
Brompton Split Banc Corp.
Kicked off on November 16, 2005, the fund invests in common shares of prominent banks in Canada, with Class A shares NAV at $8.26 or $10.10 for Preferred shares. The distribution rate for A shares is 13.4%, while for Preferred shares, it stands at 6.2%.
The CAD fund holds $399 million of assets. The management charge is 0.55% per year and maturity is November 29, 2027.
Over the last year, the Class A shares saw a negative return of 2.4%, but the gain was 8% in the previous five years and 10.2% since they were issued.
The Preferred Shares earned 5.4% over the course of the last five years and 6.4% in the prior year. The yield was 5.1% since they were distributed.
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