Back in December of 2009 Larry MacDonald of Canadian Business Online interviewed The Dividend Guy and myself on the investment product Dividend 15 Split Corp (DFN) which at that time was paying a reported 11% dividend. Our comments in the post, titled Looking at dividend yield of 11%, dealt mainly with the risks of investors looking to an investment based solely on yield and not understanding how an investment works or the risks involved that may not be apparent at first glance.
Quadravest Capital Management Inc. has a new product out this month, Dividend Select 15 (DS), which is a similar product that concentrates holdings in 15 Canadian investments and uses options to supplement and add extra income to achieve a targeted payout on the investment.
My opinion on these types of products can be found at the bottom of Larry MacDonald’s post and any investor considering this product should read the prospectus prior to initiating a position. Understanding the risks and limitations of such a product is very important.