As the holiday season approaches, I wanted to take a moment to express my sincere gratitude for the outstanding service your team has consistently provided. Your expertise and dedication have been invaluable.
Considering the current financial climate where interest rates seem to be stabilizing or decreasing, I'm contemplating whether it's an opportune time to invest in split shares mostly for dividends for 1 to 3 years hold. Do you see any issues? if not would you recommend top 2 split shares in Canada.
Thank you for the kind words.
In general, we are not big fans of split shares. There is no free lunch with these structures and what might be made on excess distributions is typically given up, in some form or fashion, through lower capital gains. Many have stopped dividends more than once. Also, with diversified REIT ETFs yielding 5.4% and bank ETFs yielding something in the 5% range, we are not sure split share structures are overly necessary, given attractive yields in other areas. So while we are not fans in general, if the economy, rates and the markets co-operate, split shares could still do well. But investors need to understand the risks, and we do not think they are for conservative investors. DFN has re-started dividends and is looking better. It has good leverage if markets do rise. LCS has omitted dividends for a short period several times in the past, but still has a very good 5-year annualized return. It skipped one month last June but has been solid since. 5-year annualized return is 28.29%.