Dividend 15 Split: A Minor Setback in a Stellar Run for Canada’s Income-Focused Fund

Class A shares fall 1.5% after ex-dividend, but 12-month return nears 49%. Fund offers 13.45% yield backed by covered-call strategy and 1.5x coverage ratio.

The Class A shares of Dividend 15 Split Corp. slipped 1.5% to C$8.81 on Tuesday, a predictable pullback after the stock went ex-dividend for its June payout. Shareholders who held through Monday will receive the monthly distribution of C$0.10 per unit on July 10, while the market now resets its sights on the next qualification date. The dip, however, barely dents a blistering 12-month performance that has seen the price climb nearly 49% from a year ago.

Even after the ex-div adjustment, the fund remains just 1.7% below its 52-week high of C$8.97, set on June 26. The year-to-date gain stands at roughly 18%, and the shares trade about 17% above their 200-day moving average of C$7.53. Technical indicators still look constructive: the relative strength index sits at 69.2, shy of the classic overbought threshold of 70 but reflecting sustained buying momentum.

At the heart of the appeal is a yield that exceeds 13%. The monthly payout of C$1.20 on an annualized basis works out to a dividend yield of approximately 13.45% at the current price. Crucially, that distribution is well covered. The fund’s portfolio generates enough income to support a coverage ratio of about 1.5 times the payout, leaving a comfortable buffer. The net asset value stood at C$19.64 per Class A share as of mid-June, far above the market price, and when combined with all distributions made to date the total value reaches C$60.89.

Quadravest, the fund manager, employs an active covered-call strategy to supplement dividend income. By writing call options on the underlying blue-chip holdings, the fund collects premium income that bolsters the monthly cash available for Class A shareholders. The portfolio is concentrated in 15 large Canadian dividend payers, including Royal Bank of Canada, Toronto-Dominion Bank, Bank of Montreal, Bank of Nova Scotia, Manulife, Suncor Energy, Enbridge, and Loblaw. Each position is capped between 4% and 8% of the total, with up to 15% of net assets allowed for names outside the core list.

Beyond the Class A shares, the fund also offers preferred units (DFN.PR.A) that pay a fixed monthly dividend of C$0.05833, equivalent to a 7.00% annual yield on the original issue price. Short interest in the common stock is negligible at just 0.09% of the float, indicating little bearish conviction.

With the latest ex-div date behind it, attention now turns to the August payout. The fund’s next monthly distribution will be declared in mid-July, and investors will weigh whether the current share price still offers an attractive entry point. The fund’s structure is designed to run until December 2029, with options for five-year renewals, and since inception it has returned a cumulative C$29.30 per Class A share to holders. For income-oriented investors willing to ride the occasional ex-div dip, the machine keeps churning.