A final prospectus for Low Volatility Canadian Equities Income Fund has been filed for a $100 million initial public offering of units, Connor, Clark & Lunn Capital Markets Inc., the fund’s manager, said Thursday.
The closed-end investment fund proposes to offer units at a price of $10 each. The offering is expected to close on February 7. The Toronto Stock Exchange has conditionally approved the listing of the units under the symbol LOW.UN.
The fund has been created to invest in an equally-weighted portfolio comprised of the 30 equity securities which have the lowest volatility of those securities included in the S&P/TSX Composite Index that have a minimum specified current yield at the time of investment.
CC&L will write covered call options from time to time on up to 25% of the portfolio in order to seek to earn income from option premiums to supplement the dividends and distributions generated by the portfolio and to further decrease the overall volatility of returns associated with the portfolio securities.
The fund’s investment objectives are to provide investors with stable monthly distributions; the opportunity for capital appreciation; and an investment in a portfolio of Canadian equity securities that exhibit low volatility of returns.
The fund’s initial distribution target is expected to be $0.05 per unit per month, representing an initial yield on 6% per year.
The units are being offered for sale by a syndicate of agents co-led by BMO Capital Markets, CIBC and RBC Capital Markets, and including TD Securities Inc., GMP Securities L.P., National Bank Financial Inc., Scotia Capital Inc., HSBC Securities (Canada) Inc., Macquarie Private Wealth Inc., Raymond James Ltd., Canaccord Genuity Corp. and Mackie Research Capital Corp.