Premium Income Fund Reports $69.8M Net Asset Gain on Bank Holdings

Premium Income Corporation, the Toronto-listed fund that holds the six largest Canadian bank stocks, posted a $69.8 million increase in net assets for the six months ended April 30. That works out to $3.91 per Class A share.

Net assets at period-end reached $229.4 million, or $12.39 per Class A share. After the May 2026 share split, the adjusted figure stands at $11.26 per share. The fund paid cash distributions of $0.64 per preferred share and $0.52 per Class A share over the period.

The fund's portfolio is concentrated in the Big Six Canadian lenders: Royal Bank (RY), TD Bank (TD), Bank of Nova Scotia (BNS), Bank of Montreal, Canadian Imperial Bank of Commerce, and National Bank of Canada. Mulvihill Capital Management runs the portfolio. Up to 10% of net asset value can go into other equities, fixed income, or investment funds.

Dividend income from those bank holdings covered the cash distributions. The fund's structure gives retail investors a single-ticker way to own the sector. The preferred shares offer a fixed-income return. The Class A shares track the portfolio's net asset value, minus management fees.

The Canadian bank sector has dealt with slower loan growth and higher provisions over the past year. Even so, the dividend stream from the major banks has held steady. The fund's NAV increase suggests that dividend income plus moderate price appreciation in the underlying stocks drove the gain.

AlphaScala's Alpha Scores for the three Canadian banks with stock pages range from 56 to 71, all within the Moderate band. TD Bank sits at the high end, Bank of Nova Scotia at the low end. Royal Bank lands in between. The scores reflect balanced risk-reward at current valuations.

The fund paid $0.64 per preferred share and $0.52 per Class A share in cash distributions during the six-month period.