Gold Miners Split Corp. [GLC-NEO, GLC.PR.A] has completed an initial public offering of shares that raised over $30 million, Evolve Funds Group Inc. said Friday May 24 in a press release. Closing of the IPO sets the stage for Gold Miners Split to invest in a portfolio consisting primarily of gold mining issuers, which is deems to be an alternative asset class as well as a safe haven and inflation hedge.
The Class A shares and Preferred shares began trading on the Neo Exchange Friday. The preferred shares traded at $10 Friday on volume of 142,300.
Gold Miners Split is a Toronto-based mutual fund company that differs from conventional mutual funds in a number of ways. For example, while the Preferred shares and Class A shares of the company may be surrendered at any time for redemption, the redemption price is payable monthly. By contrast, the securities of most conventional mutual funds are redeemable daily.
Also the Preferred shares and Class A shares of the company are to have a stock exchange listing, whereas the securities of most conventional mutual funds do not.
Unlike most conventional mutual funds, the Preferred shares and Class A shares will not be offered on a continuous basis.
The company’s investment objectives with respect to the Preferred shares are as follows: To provide holders of the Preferred shares with cumulative preferential quarterly cash dividends, the amount of which is to be fixed by the board of directors
The quarterly cash distribution will be $0.15 per Preferred share ($0.60 per annum), representing a yield of 6.0% per annum of the issued price of $10 per Preferred share until the termination date.
The company’s investment objective with respect to the Class A shares is to provide the holders with the opportunity for capital appreciation.
To achieve its investment objectives, the company will provide investors with exposure to a portfolio consisting primarily of common shares of gold mining issuers included in the S&P/TSX Global Gold Index, the NYSE Arca Gold Miners Index and/or the MVIS Global Junior Gold Miners Index selected by the manager.
The manager will only purchase securities for inclusion in the portfolio that are listed in Canada, the U.S., Australia or Europe.
In order to quality for inclusion in the portfolio, at the time of investment and at the time of each reconstitution, at least 90% of the total assets of the company must be invested in issuers included in the constituent index. At least 90% of the total assets of the company must be invested in issuers that have a market capitalization of no less than $350 million.
At least 60% of the total assets of the company must be invested in issuers that have a market capitalization of no less than $1 billion.
The company is not subject to restrictions in the amount of cash or cash equivalents that it can hold at any time.
Gold Miners Split will not make any investment in an issuer that would result in holdings of that issuer comprising more than 8% of the net asset value of the company at the time of the investment.
IPO Documents filed on SEDAR indicate that the manager believes that the gold mining industry represents an attractive opportunity for long term appreciation with several potential catalysts for growth that could materialize over a shorter term horizon.
“In today’s macroeconomic environment characterized by elevated stock valuations, depressed short-term and long-term bond yields, and heightened geopolitical risk, the manager seeks to highlight gold’s relevance as an alternative asset class that has historically acted as a safe haven and inflation hedge,” the company said in the IPO prospectus.