Is the new Wilson LIC, WAM Strategic Value (ASX:WAR) a buy?
Whilst WAM has proven form using the underlying investment strategies planned for this new LIC, there are a few reasons why I would be cautious about jumping in. The performance fee is high, opportunities for this overall strategy have dried up somewhat compared to last year, and then there are the usual potential issues of buying LICs at IPO.
Continue reading “WHICH LICs WILL WAM GO TO WAR ON? WAM STRATEGIC VALUE REVIEW (ASX:WAR)”
This is a guest post that I thought would be of interest to my readers. It is in the spirit of Melbourne Cup Day, so I will be tempted soon in having my own punt on a LIC trifecta in the comments section at the end (feel free to do the same). Please read below to find out more about the author. (Note I have no affiliation with the below author / business).
Continue reading “Guest Post – The ‘Melbourne Cup of LICs’: Our form guide and three favourites”
I came across a couple of articles in the last week or so that reminded me we are indeed in buoyant times with regards to the appetite for new LICs, reminding me about the times just before about 2005. This eventually spelled trouble for many as they were hit with widening discounts to NTA after the GFC. Continue reading “DANGER IN LICs?”
I have made a guest post on a website I only recently came across, but now see it as being a useful tool for many investors. My article here touches on points I probably have already made on the blog but thought I shall share the link here anyway.
Continue reading “FOLLOWING THE BEST INVESTORS & WHICH GLOBAL MARKETS OFFER MORE VALUE?”
I nearly always enter an investment assuming I may be holding that company in terms of years not months, but with some selling I have done of late it hasn’t turned out that way. A month or two ago I pointed out the difference in performance of the leading companies on the ASX versus the small ordinaries over the last year or so. Continue reading “TAKING PROFITS IN SOME SMALLER LICs”
REF – A 1 cent fully franked dividend was confirmed recently. Whilst I fully expected this sometimes I feel the stock is priced such that the market expects management to waste the cash on some ridiculous acquisition. So to see the dividend actually declared is still pleasing. Continue reading “REPORTING SEASON updates REF, UOS, SSM, PTB, MEL, APW, MVT, TOP.”
I wrote a couple of months back about an activist LIC in GVF was a good opportunity at the time with the discount to NTA over 10% and I note with interest already today the discount has closed completely. I think investors like the fact it gives them non AUD exposure, this has assisted their numbers greatly since listing. They also probably appreciate it offers a different investing style, it can have some comparison with 2 other LICs mentioned below. Continue reading “ACTIVIST LIC’s”
In 2010 I had a very large percentage of my portfolio in Listed Investment Companies (LICs). Stock markets had already had a huge bounce from the financial crisis lows yet some LICs surprisingly still traded at very large discounts to NTA. MFF & TGG spring to mind as these traded at discounts to NTA in the order of 20-25%. The Wilson asset management funds the same or even larger. MFF & TGG appealingly had portfolios of large multinational companies on undemanding multiples listed in major exchanges in the world, unhedged at a time when the AUD was very overvalued. It was almost like paying 75 cents and receiving a $1 instantly. HHV also was at a big discount although their portfolio was not as clean.
I bring this up as I noticed TGG and HHV seeing bigger discounts of late. I remember selling both stocks very close to NTA (less than 5% and TGG may have even been at a premium). Once they get close to the NTA or premiums it is normally far too tempting for them to conduct a capital raising and boost the AUM fees so it is wise not to fall in love with them. This occurred with TGG and HHV on more than one occasion. Now these recently have seen discounts again nearing 15%. Not yet tempting enough for me to buy as the underlying holdings I am also not as bullish yet, however I’ve began to watch them a little closer. I know WAM is a major holder in both and likely to pressure for more active stock buybacks and larger franked dividends. If the AUD rises again to recent highs in the high 70s and these discounts further widen they may soon appeal to gain some offshore exposure.
Another quick example to highlight the fickle nature of these vehicles is TOP. Early December it amazingly traded at a 7% premium to NTA. Their investments have done very well since yet this week traded at an 11% discount. In other words you could have bought TOP back then, patted yourself on the back with regards to the underlying portfolio rising by about 6%, yet be down 11% on your investment!