Year end distributions - 2005

[yielder]

I'll gladly pay a bit of taxes.

So will I but I'm a bit leery of this cap gain. Since 1995 the only other year for a cap gain was 2000 according to the G&M database. IIRC, most of that came from Nortel which they had to sell because it didn't pay a div and BCE which they had to reduce below 15%. So why this cap gain? Has the turnover ratio gone up? Can't tell from the June semi-annual since it's not included. It'll be interesting to look at the annual report and the list of securities bought and sold.

[DanH]

I'll gladly pay a bit of taxes.

So will I but I'm a bit leery of this cap gain. Since 1995 the only other year for a cap gain was 2000 according to the G&M database. IIRC, most of that came from Nortel which they had to sell because it didn't pay a div and BCE which they had to reduce below 15%. So why this cap gain? Has the turnover ratio gone up? Can't tell from the June semi-annual since it's not included. It'll be interesting to look at the annual report and the list of securities bought and sold.

IIRC, historical annual turnover for this fund is in the 25% range. The semi annual may not list turnover, but the info is there to calculate it. If turnover has ramped up a bit I would neither be surprised nor concerned. I expect turnover to spike in a rising market - particularly after three years of a rising market where this fund's target stocks have been the darlings.

[yielder]

IIRC, historical annual turnover for this fund is in the 25% range. The semi annual may not list turnover, but the info is there to calculate it. If turnover has ramped up a bit I would neither be surprised nor concerned. I expect turnover to spike in a rising market - particularly after three years of a rising market where this fund's target stocks have been the darlings.

2000: 41.98%
2001: 20.08%
2002: 22.59%
2003: 9.35%
2004: 8.42%

Looks like the first half of 2005 is ~ 45% depending on what average net assets were for the period.

If they are selling because of a rising market, what are they buying if income earnings stocks are increasingly expensive? Or are they re-deploying from expensive stocks into less expensive but still expensive stocks?

There were 11 holdings sold during the period. All had small buys before being liquidated which is quite possible if thinking changed over the period. The following three have seemingly strange stuff going on. I'll accept that Alcan and Suncor reflect uncertainty but the iUnits trades are definitely strange - 100% turnover.

Code: Select all

Stock               12/31/04    Buys    Sells     6/30/05

Alcan                 657.0     937.0   657.0      937.0
Suncor               2268.6     144.0   127.1    2,285.5
TSX 60 iUnits        1012.9    1040.3  1123.5     1096.1


It'll be interesting to see the full year numbers & detail.

[Shakespeare]

but the iUnits trades are definitely strange - 100% turnover.

"Strange" or "storage"; i.e. money parking?

[DanH]

but the iUnits trades are definitely strange - 100% turnover.

"Strange" or "storage"; i.e. money parking?

Yes, my cursory guess on this is that they use i60s to minimize cash drag. Makes sense given that the fund probably has enjoyed high inflows (given the environment) and this large cap portfolio probably is highly correlated to the i60s. So, it's a short term parking spot if cash builds up too quickly.

As for other stocks mentioned by yielder, the reasons could be one of many. I often ask about specific trades, with a potential motivation or two in mind, and sometimes the reply is something I had not considered - or was not apparent given the limited information. So, I won't guess re: Alcan and Suncor.

[gossg]

And TD always seems to do this the last business day before Christmas, so that the desperately lower NAV sits there glaring for several days until "next day".

The 7% loss in the particular TD fund sat there from the day before Christmas (Friday) until Tuesday when a distribution dated the 23rd retroactively appeared in my stock tracker (Globefund).

I've learned not to get upset by abrupt losses in TD funds over Christmas.