KFL - discount to diluted NAV

[Balance]

Ratkin, are you in shock or in awe of KFL going nowhere after 4 years? Meanwhile, BRM is down 40% in 18 months (quite an achievement) and Marlin is down 30% in 6 months (even more outstanding). I recall you getting all hot and excited about them?

Bitter could not be further from the truth - bemused and having a great chuckle. Don't you find it amusing that they have been recommending and still recommends a fund that has gone no way in 4 years? I do but I am sure there are a lot of Fisher investors wondering why they ever bothered?

What does Morningside actually do? They earn a fee for assessing funds and recommending them. So expect them to be very independent and objective.

[baxter]

Nonetheless they seem to have done a little better than ING whose partowner ANZ convinced many vulnerable customers to invest in their ironclad funds.

[Toulouse - Luzern]

Since 1 April Sample FFM portfolios (indicative):
NZ FFM +3%
AU FFM +4%

[Balance]

Since 1 April Sample FFM portfolios (indicative):
NZ FFM +3%
AU FFM +4%

Wow!

Since April 2004 to yesterday when KFL listed, NZX up 40%. KFL up 11%.

Since Oct 2006 when BRM listed, Australian market up 4.4%. BRM down 33%.

Meanwhile, lots and lots of management fees charged - millions. Who has been making out like robbers?

[voltage]

Kingfish must be a screaming buy at 30% discount and the shares they own also well below NTA. Have I missed something???

[Excelsior]

Kingfish must be a screaming buy at 30% discount and the shares they own also well below NTA. Have I missed something???

I guess growth shares get severely rerated in a down market - lots of shares even with reliable income are now heavily discounted. KFL has a few of these in its portfolio though. Also experienced investors don't like the thought of paying management fees, and I wouldn't image many novice investors which KFL probably appeals more to are buying in this market
What happens if many of Fishers managed funds investors succumb to the fear of losing money and want to redeem their units. Fishers becomes a forced seller of some relatively illiquid shares which drives these prices down markedly and hence the asset backing. Can't see much new money coming into these funds for a while to balance this. Look at how the prices of CVT, OIC, SLG etc fluctuate. The high prices of these stocks a year ago must've been due in part to Fishers aggressive buying of these when the money was available. Perhaps the reverse is now happening.
But you're right Voltage the discount is pretty tempting and I did buy a few of these below a dollar.

[voltage]

This stock must be bargain basement running at 30% below NTA, will buy more.

[macduffy]

Yes, it's pretty much the norm for investment companies to trade at a discount to NAV. And it usually becomes more pronounced in a bear market.
Wouldn't touch it myself in these conditions.

;)

[Excelsior]

The fact that KFL has been trading at a 30% discount to NAV since December 2005.

Love these fools and their money.

Alot of the reason for that was the potential dilutionary effects of the options on asset backing. Now that's out of the way 30% is pretty attractive if you've got faith in the portfolio. And no performance fee until their backover the high water mark of 1.70 odd

[winner69]

In spite of all the magic that Carmel weaves shareprice still big discount to NAV .... NAV a $1 and shreprice 70 something

Latest scheme is to pay out 8% of NAV to shareholders each year in addition to the dividends .... take it every shareholder gets a go at this cause there seems to be a reinvestment scheme available

She thinks this will get te shareprice back to NAV

[Grimy]

It will be interesting to see the details of the new plan.
I have some KFL. I would normally buy individual stocks, but as I like most of the companies in KFL, and couldn't afford to buy them individually I went with KFL. Also the discount was attractive.

[biker]

In spite of all the magic that Carmel weaves shareprice still big discount to NAV .... NAV a $1 and shreprice 70 something

Latest scheme is to pay out 8% of NAV to shareholders each year in addition to the dividends .... take it every shareholder gets a go at this cause there seems to be a reinvestment scheme available

She thinks this will get te shareprice back to NAV


Always a worry when someone of her status starts writing columns in a sunday tabloid.

[sharer]

.. of significance to share price, discount to NAV, & how this "should" vary cyclically under new dividend regime, [& other info important to members above who propose to rush into further investing in KFL, BRM or Merlin] : can all be found in what sounds like very reasonable & well-informed article in today's Sunday Star Times. Don't spend any money until you've read it, & pondered, would sound like good advice perhaps?
All best of luck & good wishes,
Sharer.

[Arbitrage]

Interesting AGM this morning. Crowd very subdued. Carmel gave a talk on the back of a good share price rise since March. Everyone seemed happy. However, being the cynic I looked at the numbers and they hadn't really performed ahead of the major indices. No one questioned this although the chairman did say that a lot of equity investment companies had performed as badly.
Plus a new way of distributing income has been proposed. Should keep those relying on the company for regular income happy.
Good food afterwards and plenty of it despite the usual rush.

[winner69]

KFL annual meeting today

Although total shareholder returns were down to 3.3 % from 18.2 percent the previous year due primarily to the fund’s then flagging share price, this year’s net asset value performance was good enough for the manager to be paid an outperformance fee of $1 million in shares and $1 million cash, on top of its 1.25 percent annual fee.

What's that saying you keep repeating Balance

[Balance]

KFL annual meeting today

Although total shareholder returns were down to 3.3 % from 18.2 percent the previous year due primarily to the fund’s then flagging share price, this year’s net asset value performance was good enough for the manager to be paid an outperformance fee of $1 million in shares and $1 million cash, on top of its 1.25 percent annual fee.

What's that saying you keep repeating Balance

"She is crying softly into her champagne on the balcony of the 5 Star hotel looking towards the Eiffel Tower" - it's too easy.

"heads we win and tails they lose."

KFL has underperformed by over 130% against NZX50 since listing if anyone bother to do a relative performance chart.

[winner69]

"She is crying softly into her champagne on the balcony of the 5 Star hotel looking towards the Eiffel Tower" - it's too easy.

"heads we win and tails they lose."

KFL has underperformed by over 130% against NZX50 since listing if anyone bother to do a relative performance chart.

But Balance - taking a portion of the outperformance fee in shares is a vote of confidence in the fund and continued outperormance

[Balance]

But Balance - taking a portion of the outperformance fee in shares is a vote of confidence in the fund and continued outperormance

Haha - as related to the wide-eyed unit holders chomping down the cheap sausage rolls and Raro powdered passionfruit/mango/orange juices at the AGM?

Do you know that an investment in AIA (no-brainer boring and predictable low beta stock) would have generated 260% more return than KFL since KFL was listed?

Plus one does not have to read the sorry arse excuses from KFL about why they have consistently underperformed but still charge management fees (and out performance fess) ! :D

[winner69]

Balance - I do like that slide in the presentation that shows NAV increased from $166.m to $208m over the year

A solid $42m increase looks very good - but $28m came from exercise of warrants (new capital)

Suppose they charge their management fee on these extra funds?

[Balance]

Balance - I do like that slide in the presentation that shows NAV increased from $166.m to $208m over the year

A solid $42m increase looks very good - but $28m came from exercise of warrants (new capital)

Suppose they charge their management fee on these extra funds?

You got it, W69.

Pay capital back to give the illusion of performance (wow - high yielding stock, see!) and then ....

..... issue zillions of options (in the money) every so often so that punters put their own money back (or else get diluted by those who exercise) - and keep the management fees going.

The illusion has become reality!

Too easy - oldest trick in the book but works every time!

PS. Must plan the next trip to Paris to sip some more champagne. The management fees are getting embarrassingly high :D

[Sideshow Bob]

Hey Balance, did you nominate Carmel for entrepreneur of the year as her biggest fan?? :p

http://www.ey.com/NZ/en/About-us/Entrepreneurship/Entrepreneur-Of-The-Year/EY-meet-the-2016-finalists

[Balance]

Hey Balance, did you nominate Carmel for entrepreneur of the year as her biggest fan?? :p

http://www.ey.com/NZ/en/About-us/Entrepreneurship/Entrepreneur-Of-The-Year/EY-meet-the-2016-finalists

But of course.

I have great admiration for her ability to generate management fees - through all means possible, good times plenty and bad times even more!*












*relative to what unitholders get. :D

[Balance]

Hey Balance, did you nominate Carmel for entrepreneur of the year as her biggest fan?? :p

http://www.ey.com/NZ/en/About-us/Entrepreneurship/Entrepreneur-Of-The-Year/EY-meet-the-2016-finalists

"Her target market was what she called ‘Mum and Dad’ investors who would be attracted by her mantra of making investing profitable, understandable and enjoyable."

Now you know the secret of her success. [deleted by STMOD]

[Snow Leopard]

Fisher Funds directors share $10.3 million dividend pot (http://www.scoop.co.nz/stories/BU1608/S00171/fisher-funds-directors-share-103-million-dividend-pot.htm)

That will probably give Balance apoplexy!

Best Wishes
Paper Tiger

[777]

Fisher Funds directors share $10.3 million dividend pot (http://www.scoop.co.nz/stories/BU1608/S00171/fisher-funds-directors-share-103-million-dividend-pot.htm)

That will probably give Balance apoplexy!

Best Wishes
Paper Tiger

Good......

[Balance]

Fisher Funds directors share $10.3 million dividend pot (http://www.scoop.co.nz/stories/BU1608/S00171/fisher-funds-directors-share-103-million-dividend-pot.htm)

That will probably give Balance apoplexy!

Best Wishes
Paper Tiger

Cool melons on a hot summer day.

Who wants to get worked up about people who leave their doors open and valuables on display while they rush to the supermarket to grab some cheapo specials?

Even the most naive rookie cop will say 'serve them right' when they get back home and find they have been burgled.

KFL unit holders kinda remind me of people like that.

Meanwhile, same money invested in a no-brainer solid dividend yielding stock like AIA would have given you outperformance of over 200% (yes, 200%) against KFL with its self-promoting-'with your money'-glorified-management 'heads they win, tails you lose' structure.

ENJOY. :D

[Sideshow Bob]

Taken from another thread for ya Balance....

http://www.nbr.co.nz/article/kingfishs-fisher-says-over-valued-nz-shares-have-no-room-earnings-disappointment-b-192315

[777]

Taken from another thread for ya Balance....

http://www.nbr.co.nz/article/kingfishs-fisher-says-over-valued-nz-shares-have-no-room-earnings-disappointment-b-192315

I think Balance made the first comment on that article.

[Balance]

Taken from another thread for ya Balance....

http://www.nbr.co.nz/article/kingfishs-fisher-says-over-valued-nz-shares-have-no-room-earnings-disappointment-b-192315


The answer of course is to move into cash but then, there's no juicy management fees to be made.

Comments like those are simply laying the groundwork (as usual) for excuses why KFL is not going to perform in the year ahead and if it does, how great the managers are.

Seen that pathetic excuse peddled out like stale 1 month old moldy bread to little ducklings many a times in the past - works everytime though as the ducklings are hungry and starved enough to swallow anything.

[Not too Flash]

Kingfish NAV released yesterday $1.3896
50% of there assets being held in MFT, FPH, RYM, FRE and IFT
Warrants currently under 2c with a further payment due next week of $1.21

An entry into a basket of these shares at a substantial discount.

Realise there will be some dilution when warrants are converted

Apart from all the inevitable comments regarding Management Fees etc - seems to be a reasonable opportunity

Comments ?

[percy]

Kingfish NAV released yesterday $1.3896
50% of there assets being held in MFT, FPH, RYM, FRE and IFT
Warrants currently under 2c with a further payment due next week of $1.21

An entry into a basket of these shares at a substantial discount.

Realise there will be some dilution when warrants are converted

Apart from all the inevitable comments regarding Management Fees etc - seems to be a reasonable opportunity

Comments ?

Take a cold shower to clear your head.
Then read Balance's post #276.

[777]

Take a cold shower to clear your head.
Then read Balance's post #276.

Can't because he is on my ignore list and there he will stay.

[percy]

Cool melons on a hot summer day.

Who wants to get worked up about people who leave their doors open and valuables on display while they rush to the supermarket to grab some cheapo specials?

Even the most naive rookie cop will say 'serve them right' when they get back home and find they have been burgled.

KFL unit holders kinda remind me of people like that.

Meanwhile, same money invested in a no-brainer solid dividend yielding stock like AIA would have given you outperformance of over 200% (yes, 200%) against KFL with its self-promoting-'with your money'-glorified-management 'heads they win, tails you lose' structure.

ENJOY. :D

Spot on.! Great post.

[Balance]

Spot on.! Great post.

Thx, Percy.

BTW, notice how NTF brings up the same postings every time a Fisher fund wrrant is due for expiry and exercise? And gets the same comments back re discount for management fees etc?

Smells a Fisher plant on the site?

[kura]

OK, I will go against the tide of thought, & state my opinion that a 9% discount to NTA makes this a reasonable investment.
I also see that they have started to do the decent thing & buy back their shares (increasing NTA per remaining share ) Just a pity it's on such a small scale so far.

[percy]

Thx, Percy.

BTW, notice how NTF brings up the same postings every time a Fisher fund wrrant is due for expiry and exercise? And gets the same comments back re discount for management fees etc?

Smells a Fisher plant on the site?

I agree with you.
You have offerred sage advice,which has cost people who have ignored it, the opportunity to invest successfully.

[arc]

Suggested reading

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11723746

[Balance]

Suggested reading

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11723746

Excerpt : "Other examples of the worship of false gods abound: the NZX listed investment companies run by Fisher Funds long ago instituted a policy whereby each quarter the funds give shareholders back some of their capital.

Directors label this return of capital a dividend thereby giving investors the warm fuzzies. You can however see from the accounts of the Marlin Global Fund, for example, that most of the dividends are actually a return of capital.

For example Marlin Global pays a dividend of 6.88 cents per share which on a share price of 79 cents is a dividend yield of 8.7 per cent.

This of course looks fabulous to the naive yield crazed investor but the reality is that all of this "dividend" is actually a return of the capital of shareholders.

According to the Marlin profit and loss account for the year ended 30 June 2016 dividend and interest income of $966,000 doesn't even cover operating expenses of $1.65 million.

This latter figure is made up of a management fee of $880,000 and various other operating costs.

There is no actual earnings, in the conventional sense of the term, available to fund a dividend. One could take this capital distribution model to its ultimate conclusion by paying out all of the company's capital to shareholders thereby delivering a fabulous yield of 100 per cent."

FOOLS AND THEIR MONIES ARE ALWAYS PARTED.

[Beagle]

Suggested reading

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11723746

Thank you for sharing. That is compulsory reading in my opinion !

[Balance]

https://www.nzx.com/companies/KFL/announcements/300392

The performance fee paid to Fisher Funds was $931,653 plus GST.

Sp as at 1 April 2016 - $1.32 (NAV - $1.3652)
Sp as at 31 March 2017 - $1.29 (NAV - $1.3854)
Dividends paid over year - 11.16c

So return = 8.16c = 6.18%

How is there an out performance (against Bank bill rate + 7%) calculated to obtain the performance fee if you are a unit holder?

Heads they win, tails you suck the lemon.

[kura]

Good question, why not ask the people at KFL for yourself ? I'm sure they would be happy to explain the detailed calculations to you !
Me ? I'm too lazy, but I'm not the one bagging KFL either.

[Balance]

Good question, why not ask the people at KFL for yourself ? I'm sure they would be happy to explain the detailed calculations to you !
Me ? I'm too lazy, but I'm not the one bagging KFL either.

But you are happy to accept their calculations and NTA and 'dividend' yield?

Good one! :D

[kura]

But you are happy to accept their calculations and NTA and 'dividend' yield?

Good one! :D

Of Course, you see I'm not the one accusing Fisher Funds of fraudulently claiming a performance fee, without bothering to do such basic research.

[percy]

Of Course, you see I'm not the one accusing Fisher Funds of fraudulently claiming a performance fee, without bothering to do such basic research.

Stay poor,while others grow wealthy,including Fisher Funds.
The choice is yours.

[777]

Stay poor,while others grow wealthy,including Fisher Funds.
The choice is yours.

What dribble. I have had KFL for 5 years or so and when I look back on all the purchases and what they worth now I am more than happy. As for the old red herring of getting your capital back in dividends I ask the question, "should all the capital gains on the funds invested not be distributed"?

We all know the unbalanced individual on numerous threads who has hate relationships with certain people and never ceases to remind us. It just gets boring year after year and yet he accuses a member of being a Fisher plant. I just wish he/she wasn't quoted in posts as negates my "ignore" on him/her.

I picked up another 150,000 warrants this week to add to the ones I got last year and I sleep well at night thinking of what they will be worth in the months ahead. It has been a good buying opportunity.

[Balance]

Of Course, you see I'm not the one accusing Fisher Funds of fraudulently claiming a performance fee, without bothering to do such basic research.

If asking a question about how performance fee is calculated constitute 'fraud', what can anyone say except "WOW'!

Strong language revealing the depth of emotional involvement?

'Never get emotional, it clouds your judgement.' :D

If it walks like a duck, quacks like a duck and behaves like a duck - it is a duck!

[Balance]

Interesting to note that in the last 10 years that :

1. KFL is down (yes, minus) 24.24%

2. NZ50 is up 71.51%

3. AIA is up 159.61%

[Balance]

In the last 12 monts :

1. NZ50 is up 8.64%

2. AIA is up 12.93%

and ...... DRUM ROLL ....

3. KFL is down (yes, MINUS) 9.71%

Performance fees, anyone? Champagne is getting warm in Paris.

:D :D :D

https://www.nbr.co.nz/article/kingfishs-fisher-says-over-valued-nz-shares-have-no-room-earnings-disappointment-b-192315

Fisher Funds wrong - 2 years in a row calling market direction. But out-performance fees nevertheless!

[kiwico]

When it comes to the fees and return of capital, a holder is effectively being charged 1.25% of gross asset value (reduced by 0.10% for every 1% of under performance relative to the change in the NZ 90 Day Bank Bill Index with a floor of 0.75%) to be paid their own capital back as a "dividend".

No thank you.

[hardt]

In the last 12 monts :

1. NZ50 is up 8.64%

2. AIA is up 12.93%

and ...... DRUM ROLL ....

3. KFL is down (yes, MINUS) 9.71%

Performance fees, anyone? Champagne is getting warm in Paris.

:D :D :D

https://www.nbr.co.nz/article/kingfishs-fisher-says-over-valued-nz-shares-have-no-room-earnings-disappointment-b-192315

Fisher Funds wrong - 2 years in a row calling market direction. But out-performance fees nevertheless!

Did not know Fisher Funds have complete control over the stock price...

[Balance]

When it comes to the fees and return of capital, a holder is effectively being charged 1.25% of gross asset value (reduced by 0.10% for every 1% of under performance relative to the change in the NZ 90 Day Bank Bill Index with a floor of 0.75%) to be paid their own capital back as a "dividend".

No thank you.


Fund returned 213% return over 13 years according to KFL - so compounding return of 6% pa.

NZ50 performed 266% over the same period - so compounding return of 7.75% pa.

Difference = 1.75% pa.

You don't have to be a Warren Buffett to know that someone pocketed that 1.75% difference - without adding one iota of added value in the investing cycle!

[Balance]

https://www.forbes.com/sites/laurengensler/2017/02/25/warren-buffett-annual-letter-2016-passive-active-investing/#317d23d9286b

Warren Buffett has said it before and he'll say it again: Don't try and beat the market with pricey, actively-managed funds. You're better off with a boring, low-cost index fund.

[stoploss]

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11898334

[SilverBack]

Fund returned 213% return over 13 years according to KFL - so compounding return of 6% pa.

NZ50 performed 266% over the same period - so compounding return of 7.75% pa.

Difference = 1.75% pa.

You don't have to be a Warren Buffett to know that someone pocketed that 1.75% difference - without adding one iota of added value in the investing cycle!

So, if you bought the NZ50 index (as in tracked the companies and moved positions company by company with zero brokerage and no index fund management fees then you win. However, if you want a high dividend income without the overheads of managing a portfolio and paying retail brokerage, then maybe KFL is not such a bad deal.
I guess it is horses for courses but for most investors, taking a position in the top 50 companies on an index basis and maintaining the movements (after brokerage) is not an economic proposition unless they have a pretty large amount to invest with a very sharp brokerage deal and the time to do the work.

[Sideshow Bob]

I see Mrs Fisher in the New Years Honours for services to business!

[Balance]

I see Mrs Fisher in the New Years Honours for services to business!

Well deserved.

I pick Rod Petrocevic for knighthood next year for services to the finance industry.

Eric Watson is due for an OBE for services to the bra industry?

[Beagle]

http://www.sharechat.co.nz/article/f734c373/kingfish-exits-michael-hill-to-focus-on-a2-f-p-healthcare-and-mainfreight.html?utm_medium=email&utm_campaign=Kingfish%20exits%20Michael%20Hill%20t o%20focus%20on%20A2%20FP%20Healthcare%20and%20Main freight&utm_content=Kingfish%20exits%20Michael%20Hill%20to %20focus%20on%20A2%20FP%20Healthcare%20and%20Mainf reight+CID_d265bb9b047e735ff0dd544daf4c5bc2&utm_source=Email%20marketing%20software&utm_term=httpwwwsharechatconzarticlef734c373kingfi sh-exits-michael-hill-to-focus-on-a2-f-p-healthcare-and-mainfreighthtml

Kingfish materially outperforming the market, pretty cool.
Disc: Hold Kingfish warrants and intend exercising them in July as a cheap entry to KFL shares.

[777]

And KFL holds 13% of their holdings in ATM.

[Beagle]

And KFL holds 13% of their holdings in ATM.

That weighting might have risen "a bit" since 31 March lol
Details of their other holdings are here http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/KFL/333633/298744.pdf

[winner69]

That weighting might have risen "a bit" since 31 March lol
Details of their other holdings are here http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/KFL/333633/298744.pdf

Probably their biggest holdings are the stocks that make up the ‘growth’ line on that chart from Harbour you were touting the other day (highlighting the ‘value’ line)

Good to see you cheering on stocks with outrageously high multiples

[Beagle]

Probably their biggest holdings are the stocks that make up the ‘growth’ line on that chart from Harbour you were touting the other day (highlighting the ‘value’ line)

Good to see you cheering on stocks with outrageously high multiples

You've got to get with the program mate and try and get somewhere near the efficient frontier :p
Yes I'm a value guy as you know but it doesn't hurt to have some stake in the high growth "darling" stocks.

[Beagle]

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/KFL/334516/299801.pdf

Added to their position in SUM.

[MauroNZ]

Fund returned 213% return over 13 years according to KFL - so compounding return of 6% pa.

NZ50 performed 266% over the same period - so compounding return of 7.75% pa.

Difference = 1.75% pa.

You don't have to be a Warren Buffett to know that someone pocketed that 1.75% difference - without adding one iota of added value in the investing cycle!

Which index fund would you prefer?

[voltage]

nz50 but via simplicity, 0.1 MER

[Beagle]

Anyone who can think for themselves can see the Kingfish fund under the current management has been outperforming in recent years http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/KFL/334516/299801.pdf

Well worth noting are all the benefits
1. PIE distributions of 8% per annum based on average NTA
2. Ability to buy shares at times at a significant discount to NTA, currently about 10%
3. DRIP whereby people can get shares in lieu of divvy at a 3% discount
4. Regular Warrant programs enabling shareholders to acquire more shares on attractive terms.

Disc: Own heaps of Warrants and will be exercising them on 12 July 2019.

[glennj]

Fund returned 213% return over 13 years according to KFL - so compounding return of 6% pa.

NZ50 performed 266% over the same period - so compounding return of 7.75% pa.

Difference = 1.75% pa.


You don't have to be a Warren Buffett to know that someone pocketed that 1.75% difference - without adding one iota of added value in the investing cycle!

I agree. Many years ago I gave Fisher money to invest and kept the same amount to invest myself in the same universe of stocks. After doing much much better than the fund manager two years running I pulled the money out and backed myself to beat their performance in to the future. I've had no regrets of self managing my own and a family members NZ and Australian share portfolios and comparisons with managed fund performances have been extremely favourable. The fees taken by the managers make a huge difference and they are not as "nimble" getting in to and out of small cap companies.

[justakiwi]

Exactly. For people like me who are beginners with small amounts to invest, who don’t have the skills or knowledge to do it myself, KFL have been a good option for me. I have bugger all shares but the DRIP has enabled me to gain extra shares along the way. While I do feel the performance fees are pretty exorbitant, I am more than happy with how my shares have done over the past few years. They are a “ small set and forget” investment for me which I am happy to sit back and watch grow. If I lose my investment so be it, but if they continue to perform as they have since I bought them, I am happy to sit on them for the foreseeable future and see what happens. Not everyone is a trading geek who has the ability, money or skills to do this for themselves. Some of us are just tadpoles trying to learn a little and hopefully manage to come out with a positive result somewhere down the track.


Anyone who can think for themselves can see the Kingfish fund under the current management has been outperforming in recent years http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/KFL/334516/299801.pdf

Well worth noting are all the benefits
1. PIE distributions of 8% per annum based on average NTA
2. Ability to buy shares at times at a significant discount to NTA, currently about 10%
3. DRIP whereby people can get shares in lieu of divvy at a 3% discount
4. Regular Warrant programs enabling shareholders to acquire more shares on attractive terms.

Disc: Own heaps of Warrants and will be exercising them on 12 July 2019.

[Beagle]

I agree. Many years ago I gave Fisher money to invest and kept the same amount to invest myself in the same universe of stocks. After doing much much better than the fund manager two years running I pulled the money out and backed myself to beat their performance in to the future. I've had no regrets of self managing my own and a family members NZ and Australian share portfolios and comparisons with managed fund performances have been extremely favourable. The fees taken by the managers make a huge difference and they are not as "nimble" getting in to and out of small cap companies.

Ownership of the company has changed as have the managers who have been outperforming the index for the last 3 years.
I manage most of my own funds myself but for some "strange reason" am unable to buy shares for 90% of their current traded price.
People who almost always point to some index or ETF fund almost always ignore the benefits I've listed in my previous post, reproduced by justakiwi directly above.
Its also well worth noting that the managers fees and their performance fee have been reduced materially since years ago when you were involved.
These guys can be more patient than an impatient Beagle so there are other intrinsic benefits as well or top of the wider diversification their portfolio brings to mine.
I no longer try and pretend I have a mortgage on all the best investment idea's on the NZX.

[glennj]

I suggest the discount is there for a reason. It is largely an offset against the level of fees encountered and expected performance if using the managed fund! I love bargains but don't or haven't in the past considered KFL to be a bargain.

[Beagle]

Each to their own but for mine seeing as the current management team are beating the relevant index after fees and one can buy shares at a 10% discount to NTA then it make sense to me to have some in my portfolio in there to increase my overall portfolio diversification.
Same applies to Barramundi and Marlin whereby I can dramatically expand the diversification of my portfolio by owning overseas shares in a simple structure that pays incredible fully tax paid PIE distributions and no FIF paperwork for me to do !
Aside from that their professional fund managers are FAR more patient as investors than I am so that's a good natural balancing thing right there too.

[MauroNZ]

Each to their own but for mine seeing as the current management team are beating the relevant index after fees and one can buy shares at a 10% discount to NTA then it make sense to me to have some in my portfolio in there to increase my overall portfolio diversification.
Same applies to Barramundi and Marlin whereby I can dramatically expand the diversification of my portfolio by owning overseas shares in a simple structure that pays incredible fully tax paid PIE distributions and no FIF paperwork for me to do !
Aside from that their professional fund managers are FAR more patient as investors than I am so that's a good natural balancing thing right there too.

So among all of them is still KFL your preferred ?

[Beagle]

So among all of them is still KFL your preferred ?

Marlin gives more exposure to the US and China markets and is my most preferred of the 3 Kingfish funds, (because I think I can make a half way reasonable job of picking NZX stocks myself) but I am nervous at present with the ongoing macerations from Trump. Forward PE on the S&P 500 is about 16 at present compared to about 22 for the NZX so I like the value their market presents.
The theft of intellectual property thing is shaping up as a major stumbling block to a trade deal between the US and China and I am not very confident a deal will be done in the foreseeable future.
For this reason I have wound back my Marlin investment a bit until the trade deal becomes clearer. Kingfish is probably a safer place in the short term.

[SilverBack]

I am not a believer in set and forget. KFL's fortunes rise and fall with the shares in its portfolios and in a market downturn they are hit too. Was it 2008 when KFL was selling for about 30% of its NTA? It was following that when the company introduced share buybacks and so will intervene when the discount gets down to 15%. That has certainly worked to hold the price up and reduce the discount. Notwithstanding the discount, why sit on KFL when their price is falling? The dividend will also be lowered and the div rate is the main attraction of KFL. I have held KFL for 4 years and the capital gain has only been 15% over the period, including taking up two sets of warrants but with divs (not reinvested) the total gain is 38%.
My policy these days is to sell the shares on downturns and treat them just like any other share.

[justakiwi]

I get what you’re saying but my holding is minuscule. It’s my only holding and unless things change for me income-wise, my ability to buy additional shares (in any company) is minimal. So I am happy to build my little holding via DRIP and let it do its thing for now. I have a very few warrants to exercise which I will do, as a way to obtain additional shares at a pretty decent price. Some of us are tiny little fish in the sea of investment but we have to start somewhere. I have started much too late sadly but this insignificant holding makes me feel at least a little proactive and gives me a “project” that hopefully stands a better chance of building value than the small amount of money invested would, if it were sitting in the bank.

[SilverBack]

I get what you’re saying but my holding is minuscule. It’s my only holding and unless things change for me income-wise, my ability to buy additional shares (in any company) is minimal. So I am happy to build my little holding via DRIP and let it do its thing for now. I have a very few warrants to exercise which I will do, as a way to obtain additional shares at a pretty decent price. Some of us are tiny little fish in the sea of investment but we have to start somewhere. I have started much too late sadly but this insignificant holding makes me feel at least a little proactive and gives me a “project” that hopefully stands a better chance of building value than the small amount of money invested would, if it were sitting in the bank.

Fair enough and in normal circumstances you will do OK but keep an eye on the markets all the same because if a downturn becomes severe and prolonged, you will lose capital that could wipe out the value of all your dividends as well, something that does not happen with a term deposit at the bank. The way in which Fisher Management set up the warrants so that they are credited any dividends since the date of issue is a clever way to make it much more likely that people will take them up and thereby increase the capital of the fund which also means that Fisher increase their fees. I think they copied this from some of the overseas funds that I have looked at.

[iceman]

I get what you’re saying but my holding is minuscule. It’s my only holding and unless things change for me income-wise, my ability to buy additional shares (in any company) is minimal. So I am happy to build my little holding via DRIP and let it do its thing for now. I have a very few warrants to exercise which I will do, as a way to obtain additional shares at a pretty decent price. Some of us are tiny little fish in the sea of investment but we have to start somewhere. I have started much too late sadly but this insignificant holding makes me feel at least a little proactive and gives me a “project” that hopefully stands a better chance of building value than the small amount of money invested would, if it were sitting in the bank.

justakiwi I think you are doing fine in your circumstances. Personally I would put my money into the USF ETF rather than KFL and trust Blackrock or Vanguard to do their job at a minimal cost. But having read your earlier posts, just stick to your knitting and build up a bit of a buffer. You will be fine.
On a personal note, I put a little bit of money into the USF each month and ignore any ups and downs, unlike my more actively managed NZX shares. I am content with that as there are simply too many potential hazards involved with that sort of number of stocks as well as various FX considerations. The USF deals with much of the FX concerns as it includes companies receiving income from all around the World in many different currencies. Stay focused

[justakiwi]

Thanks for your comments/feedback. I have been looking at ETF options for some time as I feel they would be a good option for me when funds permit. Get a bit overwhelmed in terms of whether to go through Smartshares, Superlife etc; plus which fund to choose. the USF is way out of my reach price-wise, but I realise I need to add some diversification when I am in a position to invest.


justakiwi I think you are doing fine in your circumstances. Personally I would put my money into the USF ETF rather than KFL and trust Blackrock or Vanguard to do their job at a minimal cost. But having read your earlier posts, just stick to your knitting and build up a bit of a buffer. You will be fine.
On a personal note, I put a little bit of money into the USF each month and ignore any ups and downs, unlike my more actively managed NZX shares. I am content with that as there are simply too many potential hazards involved with that sort of number of stocks as well as various FX considerations. The USF deals with much of the FX concernas as it includes companies receiving income from all around the World in many different currencies. Stay focused

[winner69]

Big divie soon

[Onion]

the USF is way out of my reach price-wise

I don't understand that statement. How is the price out of reach?

USF is just a ETF so you can buy as few or as many to suit your budget. Platforms such as InvestNow/SmartShares/SuperLife provide low cost entry to drip feed investments without incurring $30 brokerage each time.

If you want lower fees then InvestNow also give access to Vanguard ETFs -- that otherwise have a high initial investment threshhold.

[justakiwi]

Sorry if I was unclear. I meant, at the current price of over $8 I wouldn’t be in a position to buy enough to be worthwhile - but maybe my thinking is skewed.


I don't understand that statement. How is the price out of reach?

USF is just a ETF so you can buy as few or as many to suit your budget. Platforms such as InvestNow/SmartShares/SuperLife provide low cost entry to drip feed investments without incurring $30 brokerage each time.

If you want lower fees then InvestNow also give access to Vanguard ETFs -- that otherwise have a high initial investment threshhold.

[Onion]

Sorry if I was unclear. I meant, at the current price of over $8 I wouldn’t be in a position to buy enough to be worthwhile - but maybe my thinking is skewed.

I think so (skewed). $100 worth is still $100 worth at whatever share price. If that is what you have to spend it doesn't really matter what the current share price is.

Now -- if you think you can pick a time where the share prices is under or over valued then that is a completely different discussion and good luck :)

[justakiwi]

I think so (skewed). $100 worth is still $100 worth at whatever share price. If that is what you have to spend it doesn't really matter what the current share price is.

That is a very good point and one I obviously didn’t consider ;)


Now -- if you think you can pick a time where the share prices is under or over valued then that is a completely different discussion and good luck :)

Nah, I’ll leave that game to the experts ;)

[Beagle]

Don't have to be an expert with KFL. The discount to NTA is stated in their weekly release each Thursday and if its 10% or more that's the ideal time to accumulate more.

[winner69]

Beagle - you been doing the old z-score trick for investment trusts ...or is the 10% just gut feel

[Beagle]

10% is the benchmark I find useful Winner. Its not uncommon for listed investment vehicles, (even low fees ones like TEM) to trade at something of a discount to NTA and Kingfish's buyback strategy reflects that and precludes any buyback where the discount to NTA is under 8% https://www.kingfish.co.nz/assets/Uploads/Kingfish-Share-Buyback-Policy.pdf
I looked back over KFL, BRM and MLN's discount to NTA history a little while back and came to the conclusion that a discount of 10% or more represents an opportune time to acquire further shares but you have to be nimble as you're often competing with the company itself.
I have some history with investing in TEM too and found 10-11% in not uncommon.

[justakiwi]

Today’s KFL good news story:

https://www.nzx.com/announcements/335063

I’m sure the haters will still not be convinced, but I’m happy :)

[Sideshow Bob]

Large chunk in A2 would help.....

[Beagle]

Today’s KFL good news story:

https://www.nzx.com/announcements/335063

I’m sure the haters will still not be convinced, but I’m happy :)

I am too. All the Kingfish funds, Kingfish, Barramundi and Marlin are going very well and all three managed by separate investment teams.
The Kingfish group seem to be thriving under their new ownership by the TSB bank community trust.

[justakiwi]

Would really like to add some Marlin and Barramundi down the track. Between the three, that would give me a nice little diversified portfolio. And yes, things were going pretty well before the new ownership took over, but they have definitely ramped things up.


I am too. All the Kingfish funds, Kingfish, Barramundi and Marlin are going very well and all three managed by separate investment teams.
The Kingfish group seem to be thriving under their new ownership by the TSB bank community trust.

[justakiwi]

Warrants exercised today @$1.25/share. Wish I’d had more.

[777]

It is hard to understand buying KFL at the moment at 1.41/1.43 when you can buy the warrant at .12 and pay 1.25 for a total cost of 1.37. Shows the lack of understanding of warrants.

[justakiwi]

I was thinking the same thing. Discounted price and no brokerage exercising the warrants makes it a no brainer.


It is hard to understand buying KFL at the moment at 1.41/1.43 when you can buy the warrant at .12 and pay 1.25 for a total cost of 1.37. Shows the lack of understanding of warrants.

[Not too Flash]

Warrants exercised today @$1.25/share. Wish I’d had more.

As new shares aren't issued to 18 July seems very early to exercise warrants - when no point until last day on 12 July - just in case .....

[justakiwi]

Yeah I know that.

I only had a very small number if warrants to exercise, and had put the money aside to do it, so figured I would just do it now. Only talking 290 warrants so the money wasn’t earning me anything in terms of interest. If it had been large numbers of warrants I would have left my money in the bank until closer to the time.


As new shares aren't issued to 18 July seems very early to exercise warrants - when no point until last day on 12 July - just in case .....

[777]

Yeah I know that.

I only had a very small number if warrants to exercise, and had put the money aside to do it, so figured I would just do it now. Only talking 290 warrants so the money wasn’t earning me anything in terms of interest. If it had been large numbers of warrants I would have left my money in the bank until closer to the time.

Wait until they send you the entitlement form justakiwi.

[justakiwi]

I already received it via email with a link to complete an online form to exercise the warrants. Once I submitted that, they emailed me payment instructions, and I paid via internet banking. Very quick and simple process - no waiting for snail mail forms to complete.


Wait until they send you the entitlement form justakiwi.

[777]

I'll start looking in my mail box then although i thought they did come by email. Cheers.

[justakiwi]

It depends on what your chosen communication preference is. If you signed up to receive communications by email, you should have received an email yesterday. If your communication setting is to receive by snail mail, you’ll get it that way.


I'll start looking in my mail box then although i thought they did come by email. Cheers.

[JayRiggs]

Today I just received a letter from Computershare, because I am a KFL shareholder.
It is a Tax Residency Self-Certification Form - Individual.

It says:
"As a result of the New Zealand Government agreeing to participate in the exchange of information with other jurisdictions under the Foreign Account Tax Compliance Act (FATCA) and Common Reporting Standard (CRS), Financial Institutions are required to undertake due diligence to determine the account holders' jurisdiction of tax residence.

This form has been sent to you on behalf of Kingfish Limited.

If you have received this form it is important the securityholders jurisdiction of tax residence is certified. If not certified, the Financial Institution in which you are a securityholder may be required to report the security holder's name, address, amounts paid to the account and value of securities to the New Zealand Inland Revenue Department who may report those details to the Internal Revenue Service of the United States or other tax autohorities."

Did anyone else get this letter? I don't understand what this is all about. I'm an NZ tax resident, lived in NZ my whole life. Why did I get this letter? Bit of a nuisance. I don't feel like filling this form out, especially when I don't know what it's about!!!

[Snow Leopard]

Today I just received a letter from Computershare, because I am a KFL shareholder.
It is a Tax Residency Self-Certification Form - Individual.

It says:
"As a result of the New Zealand Government agreeing to participate in the exchange of information with other jurisdictions under the Foreign Account Tax Compliance Act (FATCA) and Common Reporting Standard (CRS), Financial Institutions are required to undertake due diligence to determine the account holders' jurisdiction of tax residence.

This form has been sent to you on behalf of Kingfish Limited.

If you have received this form it is important the securityholders jurisdiction of tax residence is certified. If not certified, the Financial Institution in which you are a securityholder may be required to report the security holder's name, address, amounts paid to the account and value of securities to the New Zealand Inland Revenue Department who may report those details to the Internal Revenue Service of the United States or other tax autohorities."

Did anyone else get this letter? I don't understand what this is all about. I'm an NZ tax resident, lived in NZ my whole life. Why did I get this letter? Bit of a nuisance. I don't feel like filling this form out, especially when I don't know what it's about!!!

Welcome to my world :crying:

[Beagle]

Yeah I got one a while back for my shares in Marlin, part of the Kingfish Group. In my opinion the best way to navigate this is to fill out the form and send it back.
No big deal...

[Snoopy]

Today I just received a letter from Computershare, because I am a KFL shareholder.
It is a Tax Residency Self-Certification Form - Individual.

It says:
"As a result of the New Zealand Government agreeing to participate in the exchange of information with other jurisdictions under the Foreign Account Tax Compliance Act (FATCA) and Common Reporting Standard (CRS), Financial Institutions are required to undertake due diligence to determine the account holders' jurisdiction of tax residence.

This form has been sent to you on behalf of Kingfish Limited.

If you have received this form it is important the securityholders jurisdiction of tax residence is certified. If not certified, the Financial Institution in which you are a securityholder may be required to report the security holder's name, address, amounts paid to the account and value of securities to the New Zealand Inland Revenue Department who may report those details to the Internal Revenue Service of the United States or other tax autohorities."

Did anyone else get this letter? I don't understand what this is all about. I'm an NZ tax resident, lived in NZ my whole life. Why did I get this letter? Bit of a nuisance. I don't feel like filling this form out, especially when I don't know what it's about!!!


Jay, I would say don't fill the form out. Then the NZ IRD will inform the US based IRS who will inform Donald Trump that you are a fraudulent kiwi who has been impersonating yourself, and further that you have set yourself up as a New Zealander purely to avoid paying US tax.

SNOOPY

[JayRiggs]

Yeah I got one a while back for my shares in Marlin, part of the Kingfish Group. In my opinion the best way to navigate this is to fill out the form and send it back.
No big deal...

Thanks for the advice. Nice to know others got the form too. On second inspection, there isn't that much to fill out, so I'll just do it.

[JayRiggs]

Jay, I would say don't fill the form out. Then the NZ IRD will inform the US based IRS who will inform Donald Trump that you are a fraudulent kiwi who has been impersonating yourself, and further that you have set yourself up as a New Zealander purely to avoid paying US tax.

SNOOPY


:ohmy: gulp! That leaves me with no choice!

[JayRiggs]

Welcome to my world :crying:

Follow Beagle's or Snoopy's path, take your pick :eek2:

[Snow Leopard]

Follow Beagle's or Snoopy's path, take your pick :eek2:

If I filled them in I ended up with some ignorant halfwit phoning me to tell me that the information was incorrect, that I should consult a tax advisor and I needed to redo the form.

So now I don't fill them in and when the ignorant halfwit phones me and threatens to report me to the tax authorities I tell him to go ahead.

And at the appropriate time of year for each country I have to deal with I do my tax returns with all the information and they are happy.

[Beagle]

Follow Beagle's or Snoopy's path, take your pick :eek2:

Pretty sure the other Beagle's post is tongue in cheek :)

Getting back to the Kingfish group. KFL discount to NTA is about average at present but Barramundi BRM is presenting as quite the opportunity especially the warrants BRMWE !
I have valued the warrants at 7.4 cents as of yesterday which is quite the delta to the current price of 3.0 cents.
Valuation assumes fair value of BRM is 10% discount to NTA which is a slightly deeper discount that the historical long run average and deeper than the average Marlin of Kingfish trade at. Disc: I have backed the truck and trailer up on BRMWE and will exercise these warrants on 25 October 2019 to crystalize their true value.
Free lunch on offer with the Barramundi warrants but you must have the 58 cents per warrant available at exercise and exercise them to get the real value out of this.

[justakiwi]

KFL sitting at $1.58 today. Is this just a reflection of their positive half yearly results/report? Whatever it is, I’m happy :)

[winner69]

KFL sitting at $1.58 today. Is this just a reflection of their positive half yearly results/report? Whatever it is, I’m happy :)

More a reflection of the stocks they hold going gangbusters

Everything they touch lately has turned to gold

[Beagle]

In their most recent publication they said they'd sold out their remaining small stake in FBU and topped up their stake in SUM.
SUM now in their top five holdings at 9% and ahead of their RYM stake despite the latter having several times the market cap.
Maybe they believe share prices follow earnings too ?
It seems that way and interestingly in recent months the discount to NTAS across the group has narrowed down quite significantly from historical averages.
This would suggest investors are increasingly comfortable with their investments with the Kingfish group and happy to buy on even a modest 2-5% discount to NTA.

[Beagle]

It would seem, (and with good reason in my opinion), that investors are increasingly comfortable with the performance of the various investment managers across the group.
Out today the latest NTA and share prices show
KFL now trading at just 1.5% below NTA
BRM trading at just 2.0% below NTA
MLN trading at a 1% premium to NTA !
Shareholders for all divisions of this group will be looking forward to their quarterly dividends payable on 19th December, just in time for Christmas :t_up:

[Beagle]

Kingfish performing very well. http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/KFL/346075/314082.pdf

[Beagle]

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/KFL/347408/315571.pdf

Kingfish finishes the year with a stunning last quarter performance to outperform the NZX for the year by over 8% giving total gross return of just on 39% for the year !!
Well done to the investment team. I was very impressed with the lead investment manager when I attended the annual meeting in October 2019.

Disc Hold ~ 9% portfolio allocation.

[winner69]

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/KFL/347408/315571.pdf

Kingfish finishes the year with a stunning last quarter performance to outperform the NZX for the year by over 8% giving total gross return of just on 39% for the year !!
Well done to the investment team. I was very impressed with the lead investment manager when I attended the annual meeting in October 2019.

Disc Hold ~ 9% portfolio allocation.

All very well beating the NZX and it’s own benchmark but ......

.......did it beat the BPI (beagle performance index) being how much beagle made without KFL in the portfolio

Might have dragged down your overall returns - ie diversification had a cost ...

....or worse still outperformed the BPI which means you need to pull your socks up :);):confused::eek2::p. .....and list let KFL do it all for you.

[Beagle]

All very well beating the NZX and it’s own benchmark but ......

.......did it beat the BPI (beagle performance index) being how much beagle made without KFL in the portfolio

Might have dragged down your overall returns - ie diversification had a cost ...

....or worse still outperformed the BPI which means you need to pull your socks up :);):confused::eek2::p. .....and list let KFL do it all for you.

LOL - Kingfish somewhat underperformed the BPI but between them, Barramundi and Marlin they add such a HUGE amount of diversity to my portfolio and cut down the workload so much I am a very happy investor.

[kiwico]

LOL - Kingfish somewhat underperformed the BPI.

Arguably they should somewhat under perform the BPI with their 1.25% management fee plus 10% of anything over the NZ 90 Day Bank Bill Index + 7% management fee.

With an NZ 90 Day Bank Bill Index of only circa 1% just the managed fee alone takes over 15% of gains *(1.25 / 8%) if they get close to but don't exceed their performance fee level.



Management Fee: 1.25% per annum of the gross asset value, with the capacity to reduce in a financial year by 0.1% for every 1% underperformance (relative to the change in the NZ 90 Day Bank Bill Index) subject to a 0.75% per annum management fee. This 'fulcrum' fee structure (where the fee reduces if the Manager underperforms) aligns the Manager's interests with shareholders' and is unique in New Zealand.
Performance Fee: The Manager will be paid 10% of excess returns over and above the performance fee hurdle return (being the change in the NZ 90 Day Bank Bill Index + 7%) as a performance fee (subject to achieving the High Water Mark and other rules set out in the Management Agreement). The performance fee is capped at 1.25% of the NAV at the end of the calculation period (calculated prior to accounting for the deduction of any performance fee to be paid in respect of the current calculation period).

[Beagle]

I'm getting worried about this BPI index now, sounds suspiciously like something my doctor would come up with like a blood pressure index lol
KFL's performance of 38.9% was their gross performance before fees.

[winner69]

In spite of all the doom and gloom I see KFL hit 173 a while ago

Probably at a premium to NAV

Thats good

[Beagle]

Must admit although I am exceptionally pleased with how they have performed in 2019 I am not so sure a premium to NTA is warranted ?
NTA was last measured last Wednesday at $1.6978 and the market has fallen since then by ~ 1.5% so their NTA as I type is probably not far off $1.6978 x 0.985 = $1.672. People paying above $1.70 are "pretty keen"

[winner69]

You never know some might see it as a safe place to put funds

[Beagle]

https://www.nzx.com/announcements/347736 Net Asset Value just on $1.67 as expected. I see no reason for this to trade at a premium or a discount to NAV.

[Beagle]

Thanks for crunching those numbers mate and agree its not cheap to run but I am sure those expenses include the performance fee that they have certainly well and truly earned in the last year.

As I type its $1.71 and trading at a 4 cent premium to last reported NTA. I have already taken the appropriate portfolio action at $1.70 and above any intelligent investor would.

[justakiwi]

Out of curiosity - which is what? (given that I am a very long way from being an intelligent investor ;))



I have already taken the appropriate portfolio action at $1.70 and above any intelligent investor would.

[Pipi]

So the question for me is, is it best to buy and hold KFL or the FNZ. I trying to work that out, and would appreciate anyones feedback.
Thanks

Beagle,

Agree it is hard to understand why anyone would pay a premium. I would not buy unless there is a solid discount (10%+) to NAV as the Operating Expenses are high averaging 2.76% of opening shareholders equity over the last 5 years (calcs below). Compare this to virtually no expenses for self managed or 0.1% + $30 p.a. for Simplicity NZX50 fund. Many of KFL holdings are big constituents of the NZX50 anyway including AIA, FPH, ATM, RYM, SUM, POT, MEL, IFT and MFT.

Operating Expense $m/Opening Shareholders Equity $m/Operating Expense %
2019 - $9.17 m /$276.3m /3.3%
2018 - $7.00 m /$220.1m /3.2%
2017 - $5.01 m /$208.4 m /2.4%
2016 - $4.87 m /$165.8 m /2.9%
2015 - $3.28 m /$161.8 m /2.0%

[Pipi]

Thanks for that Mogul. I will look into the Simplicity NZX50 option, I have been buying mine through Investnow. I have all the family including myself in the Simplicity kiwisaver scheme.


Simplicity NZX50 fund with fees of 0.1% plus $30 p.a. far better value than FNZ which has fees of 0.5% if you are buying a few. Can create auto withdrawals from Simplicity fund I believe if you want some income. Average operating expenses on KFL funds around 2.8% p.a. as posted above, so you would need to think the Fisher team can consistently outperform the market by around 2.6% p.a. to match the Simplicity option. Not confident on that myself when they hold a lot of the big stocks in the index anyway. It would change the equation a bit if KFL were to revert to trading at a discount, but they have been surprisingly trading at a premium recently as per Beagles post. DYOR.

Disclosure. Hold none of the above as prefer the 0% fee option of own portfolio. I do have Simplicity Kiwisaver with has fee of 0.31% plus $30 p.a.

[Beagle]

Simplicity NZX50 fund with fees of 0.1% plus $30 p.a. far better value than FNZ which has fees of 0.5% if you are buying a few. Can create auto withdrawals from Simplicity fund I believe if you want some income. Average operating expenses on KFL funds around 2.8% p.a. as posted above, so you would need to think the Fisher team can consistently outperform the market by around 2.6% p.a. to match the Simplicity option. Not confident on that myself when they hold a lot of the big stocks in the index anyway. It would change the equation a bit if KFL were to revert to trading at a discount, but they have been surprisingly trading at a premium recently as per Beagles post. DYOR.

Disclosure. Hold none of the above as prefer the 0% fee option of own portfolio. I do have Simplicity Kiwisaver with has fee of 0.31% plus $30 p.a.

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/KFL/347408/315571.pdf Ownership of Kingfish changed a few years ago to the Taranaki savings bank community trust and new investment team put in place shortly thereafter. Well worth noting that their gross performance before fees for the 3 years to 31 December 2019 was 3.5% per annum higher than the NZX50. Adds a bit of heat to the debate about whether passive or active funds management is best. I think given this, neither a premium nor a discount is warranted as its quite clear they are earning their keep.
3 year average gross performance 22.2% per annum, 3 year average NZX50 performance 18.7% per annum.

The PIE tax free status makes it dead easy for people and the regular issues of warrants makes for an interesting instrument to work with.

I currently hold none because they are not worth a premium. I manage most of my N.Z. investments myself.

[Beagle]

Yeap, I am happy. Further back than 3 years was a different investment team and the current team inherited their legacy investments. Most recent one year performance by all three seperate teams at KFL, BRM and MLN has been exceptional but I agree, past performance is no guarantee of future poerformance.
Marlin and Barramundi are especially useful to me as I don't have the time or inclination to thoroughly research a vast array of international equities.
ETF's all the rage these days but I think there's still a place for active management and the Kingfish teams are proving their worth. One advantage they have over me personally investing is they have more patience than I do :)

[winner69]

Just as Beagle deserts the ship they try to seduce him back with an offer of some free warrants.

https://www.nzx.com/announcements/348013

[winner69]

Can’t keep KFL down for long

Seems market thinks it deserves to trade at a premium to NAV

(Need to change thread title)

[justakiwi]

Can you explain to me how trading at a premium/discount works? How does one decide if a discount or premium is justified? And what it means for holders?


Can’t keep KFL down for long

Seems market thinks it deserves to trade at a premium to NAV

(Need to change thread title)

[Beagle]

It is common for listed investment companies such as Kingfish to have a share price that is different to the NAV per share. Where the share price is lower than the NAV per share, the shares are said to be trading at a discount. Where the share price is higher than the NAV per share, the shares are trading at a premium. There can be many reasons for the shares trading at a value different to the underlying NAV including expectations of future earnings and market sentiment. From Kingfish Q&A on their website. https://www.kingfish.co.nz/investor-centre/faqs/

[justakiwi]

Yes, I understand that, but how do I as a shareholder know whether the premium to NAV is justified? Some here have said it is not, so they no longer hold. Just trying to understand how one comes to that decision.


From Kingfish Q&A on their website. https://www.kingfish.co.nz/investor-centre/faqs/

[iceman]

Yes, I understand that, but how do I as a shareholder know whether the premium to NAV is justified? Some here have said it is not, so they no longer hold. Just trying to understand how one comes to that decision.

Like Beagle said there can be many reasons for it and different beliefs on future growth. So you will never “know” if it is justified, you will only know what you belief after doing your research and assumptions.


After all, successful trading is like getting pregnant. Everyone congratulates you when you manage it but no one asks how many times you got ****ed first.

[justakiwi]

:laugh::laugh::laugh::laugh:



After all, successful trading is like getting pregnant. Everyone congratulates you when you manage it but no one asks how many times you got ****ed first.

[Beagle]

Like Beagle said there can be many reasons for it and different beliefs on future growth. So you will never “know” if it is justified, you will only know what you belief after doing your research and assumptions.


After all, successful trading is like getting pregnant. Everyone congratulates you when you manage it but no one asks how many times you got ****ed first.

That's got to be the quote of the day :lol: :lol:

[Beagle]

Yes, I understand that, but how do I as a shareholder know whether the premium to NAV is justified? Some here have said it is not, so they no longer hold. Just trying to understand how one comes to that decision.

Very few managed funds in the world trade at a premium to NTA. Only those that have consistently proven they can outperform their benchmark index can sometimes attract a small premium. You can make a case that the Kingfish group as a whole have performed exceptionally well so could possibly be worth a very modest premium to NTA. I think its better to try and buy at a discount to net tangible asset backing though.

[Beagle]

Can’t keep KFL down for long

Seems market thinks it deserves to trade at a premium to NAV

(Need to change thread title)

It seems that way. Market must think the investment team at KFL are guru's.

[GTM 3442]

Funds should, theoretically, trade at NAV less fees. But sometimes it's tricky o establish NAV. And of course they don't always do so.

Put it down to "star quality" in the management team, especially the manager - you can see this "star manager" cult quite clearly in the UK.

Neil Woodford is probably the best known example (no longer for good reasons), but the Lindsell Train funds certainly command a premium to NAV, as do a number of others.


https://www2.trustnet.com/Managers/AlphaManagers.aspx?RowsPerPage=100&MP_AlphaManager_sortedColumn=LastName,Name&MP_AlphaManager_sortedDirection=Asc

https://www2.trustnet.com/Managers/ManagerFactsheet.aspx?personcode=00000287DW&univ=O

[Ggcc]

$1,76 now. I bought a few just under $1.50 and this price seems to wow me what people want to pay for a high dividend stock. I guess with current valuations of FPH, ATM, SUM, PPH IFT and Mainfreight constantly climbing to new heights. This justifies the too high share price. I also believe when the results come out from ATM, the KFL share price will hit $1.80 if all looks good with ATM.

Of course DYOR

[caveman]

Presumably the dramatic sudden price offered for KFL in the last 2 days is due to the record date for allocation of warrants, not just a dividend? However, it doesn't make sense to me to pay such a premium (170c vs 161-162 NTA).... the volumes are relatively high too...

[ordop]

Not quite. KFL went Ex the bonus issue (i.e. the warrants) on the 5th of March and so holders needed to be long KFL by close of business Wednesday the 4th to receive the KFLWF. KFL on the 4th closed at $1.65. Everyone buying yesterday up to $1.70 is just participating in a fools rally - they will however be entitled to receive the 3.24cps div as that goes Ex on the 12th of March but they're paying a reasonable premium to get it. On Monday KFL touched $1.50 and yesterday $1.70 - interesting to see where it heads next week.

[Beagle]

Totally irrational exuberance in this. Should now be trading at a 3-4% discount to NTA to reflect the dilutionary effect of the warrants about to be issued but current trading ex rights to that issue. I see fair value after the drop on the Dow overnight at about $1.50. Fund manager at KFL is very good but they're not magicians.

[caveman]

Historically KFL have always seemed a bit dodgy with many past 'dividends' really being a return of capital (minus fees etc). However, in the last year or so, EPS have exceeded divs. The volume and premium recently paid in this current environment is still a bit suspicious. Probably time to get out of the DRP. Be interesting to see what happens ex-div.

Disc I have a legacy holding of these - did ok thanks to timing.

[justakiwi]

Out of curiosity, what price would tempt you to buy KFL currently? Not talking to anyone in particular - just looking for opinions.

[winner69]

Out of curiosity, what price would tempt you to buy KFL currently? Not talking to anyone in particular - just looking for opinions.

Bit below NAV today so reasonable price

Seems they can’t go wrong with ATM and FPH a big chunk of their investments

[Beagle]

Yeah they are doing well but an investment in KFL is likely to give you a slightly above market return but the likely return of the market in the near future makes the KFL warrants a better buy in my opinion. 6 cents of so gives you the option, (but without any obligation) to buy shares at about $1.51 ($1.64 less 4 quarterly dividends) on 10 March 2021. By March 2021 we might have a much clearer picture of where we are with Covid 19. Its a crapshoot though. Those warrants might be worth 6-50 cents or they might be worth nothing.

I bought a few warrants yesterday...ticker KFLWF.

[justakiwi]

Yeah but if things turn to custard and KFL decides not to pay one or more dividends, that will make the warrants expensive to exercise won't it? I doubt that will happen but who knows.


Yeah they are doing well but an investment in KFL is likely to give you a slightly above market return but the likely return of the market in the near future makes the KFL warrants a better buy in my opinion. 6 cents of so gives you the option, (but without any obligation) to buy shares at about $1.51 ($1.64 less 4 quarterly dividends) on 10 March 2021. By March 2021 we might have a much clearer picture of where we are with Covid 19. Its a crapshoot though. Those warrants might be worth 6-50 cents or they might be worth nothing.

I bought a few warrants yesterday...ticker KFLWF.

[Beagle]

They pay divvies whatever the market conditions.

[justakiwi]

I figured they probably would so good to know.


They pay divvies whatever the market conditions.

[Not too Flash]

Interestingly the top 5 holdings now make up close to 70% of the portfolio - FPH, MFT, ATM, IFT, SUM.

[Beagle]

Interestingly the top 5 holdings now make up close to 70% of the portfolio - FPH, MFT, ATM, IFT, SUM.

I think that's too concentrated.

[winner69]

I think that's too concentrated.

At least most of the biggest holdings are winners

Only 13 stocks all up

Like this bit about Summerset - '.... the business could outperform expectations, so we had
increased our position recently'

[Beagle]

At least most of the biggest holdings are winners

Only 13 stocks all up

Like this bit about Summerset - '.... the business could outperform expectations, so we had
increased our position recently'

Not sure what they see ? Is this the third or fourth year ?, (sorry I forget), where they haven't been able to sell what they build even when they wind down the build rate significantly ?

Anyway....gotta say this fills a few gaps in my portfolio as some of their real winners are not held by me in my own name.

[Not too Flash]

I think that's too concentrated.

Possibly - but when they have a day like today ........

[Beagle]

Possibly - but when they have a day like today ........
I am pleased I have a significant stake with Kingfish warrants (KFLWF). I am not entirely convinced by their strategy with their Kingfish fund which is quite dramatically more concentrated that either Marlin or Barramundi but the benefit of the warrants is they cost me very little (6.8 cents each on average), and I don't have to decide if their strategy has worked well until they're potentially exercisable on 10/03/21. My estimate of the exercise price is $1.51, (exercise price is the face value $1.64 less dividends paid during the term of the warrants). I think with the shares at $1.70, and an exercise price of approx. $1.51 the warrants are both very good value at around 10 cents but also provide a great deal of very valuable optionality going forward. It feels to me like a great time with current Covid risks to have excellent upside exposure with limited downside risk and that's the benefit the warrants confer until 10 March 2021.

[winner69]

Possibly - but when they have a day like today ........

A2, FPH and in particular SUM helping boost them today

Good picks ...winners all.

[winner69]

With 15% in A2 fund taking a bit of a hit

But Summerset helping them out

[Beagle]

They did very well adding to SUM quite a while back...hope you did really well doing the same.

[Beagle]

Huge jump in NTA of just on 9 cents per share announced today to just nudging on $1.79 which I think is a new all time high. https://www.nzx.com/announcements/361563
I expect the exercise price of the Kingfish warrants KFLWF on 12 March 2021 to be $1.51 and on an adjusted and fully diluted basis I assess fair value of the warrants today at 22.4 cps.
(Opportunity knocks ! Quite an opportunity there with the last trade at 15.7 cps and plenty of offer at 16.5 cps).

Disc: I hold quite a few and intent to exercise my warrants and convert to shares on 12/03/21.
Big stakes in MFT, IFT, FPH, ATM SUM and others I don't own so this fills a lot of portfolio gaps for me and provides excellent diversification and moderates my risk while still enjoying awesome returns.

A reminder that Kingfish pay 2% per quarter (8% per annum) in PIE dividends based on asset value and this represents a ~ 12% gross return for 33% taxpayers.

[Beagle]

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/KFL/361873/333416.pdf

Summerset their star performer in the Sept quarter. KFLWF warrants are still trading well below their fair value in my opinion, see above.

[mike2020]

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/KFL/361873/333416.pdf

Summerset their star performer in the Sept quarter. KFLWF warrants are still trading well below their fair value in my opinion, see above.
This is the first time in a long time I have not held the warrants and what a mistake that has proven to be. From 7 cents this has to be a one of the top performers of 2020. No one listened to you did they Mr Beagle.

[Beagle]

Huge jump in NTA of just on 9 cents per share announced today to just nudging on $1.79 which I think is a new all time high. https://www.nzx.com/announcements/361563
I expect the exercise price of the Kingfish warrants KFLWF on 12 March 2021 to be $1.51 and on an adjusted and fully diluted basis I assess fair value of the warrants today at 22.4 cps.
(Opportunity knocks ! Quite an opportunity there with the last trade at 15.7 cps and plenty of offer at 16.5 cps).

Disc: I hold quite a few and intent to exercise my warrants and convert to shares on 12/03/21.
Big stakes in MFT, IFT, FPH, ATM SUM and others I don't own so this fills a lot of portfolio gaps for me and provides excellent diversification and moderates my risk while still enjoying awesome returns.

A reminder that Kingfish pay 2% per quarter (8% per annum) in PIE dividends based on asset value and this represents a ~ 12% gross return for 33% taxpayers.


This is the first time in a long time I have not held the warrants and what a mistake that has proven to be. From 7 cents this has to be a one of the top performers of 2020. No one listened to you did they Mr Beagle.
No and its very rare I leave a feed on the table and highlight the fact, Above is from 15 October, up 68% in just over a month. I have heaps already :D

[mikeybycrikey]

What is going on with KFL at the moment with the SP ($1.94) running about 11 cents ahead of the most recent NTA ($1.8257 on Wed)?

Given that it's often running at a 2% or 3% discount, what has got it to a 4% or 5% premium?

[alokdhir]

What is going on with KFL at the moment with the SP ($1.94) running about 11 cents ahead of the most recent NTA ($1.8257 on Wed)?

Given that it's often running at a 2% or 3% discount, what has got it to a 4% or 5% premium?

Its called demand / supply mismatch ....better to stay away . Real NAV after dilution on 17th march is extra 6 cents less then being reported . So almost 9% premium ...funny stuff .

Holders happy to hold ...buyers desperate to buy :D

[Beagle]

People are prepared to pay for top performing funds. Is it really that surprising that people are chasing a reliable tax free PIE yield of 2% per quarter in this zero interest rate environment ?

[Beagle]

Huge jump in NTA of just on 9 cents per share announced today to just nudging on $1.79 which I think is a new all time high. https://www.nzx.com/announcements/361563
I expect the exercise price of the Kingfish warrants KFLWF on 12 March 2021 to be $1.51 and on an adjusted and fully diluted basis I assess fair value of the warrants today at 22.4 cps.
(Opportunity knocks ! Quite an opportunity there with the last trade at 15.7 cps and plenty of offer at 16.5 cps).

Disc: I hold quite a few and intent to exercise my warrants and convert to shares on 12/03/21.
Big stakes in MFT, IFT, FPH, ATM SUM and others I don't own so this fills a lot of portfolio gaps for me and provides excellent diversification and moderates my risk while still enjoying awesome returns.

A reminder that Kingfish pay 2% per quarter (8% per annum) in PIE dividends based on asset value and this represents a ~ 12% gross return for 33% taxpayers.

From last month. KFLWF now bid 30 cents, nearly doubled in a month. I could very, very easily have bought all the warrants on offer at 16.5 cents but I chose to magnanimously highlight this extremely lucrative opportunity for others. Going off some recent comments in the ATM thread I'd be easily forgiven for thinking I have a large number of haters.

I like to think I make a positive difference for people and try too but I think I am often misunderstood. Above is one of countless times over more than a decade and 17,000 posts I have tried to highlight opportunities for others benefit and to point out risks. Sadly...I think its well and truly overdue that I reassess how much time I spend on this forum.

[keerti]

Hi Beagle,

I am extremely grateful for your advise and take all your suggestions very very seriously. I have missed this because of lack of understanding of the Warrants:(.
Please continue posting in the forum, you and other old members are invaluable to the group.

Thanks,
Keerti

[Bev73]

[QUOTE=keerti;859265]Hi Beagle,

I am extremely grateful for your advise and take all your suggestions very very seriously. I have missed this because of lack of understanding of the Warrants:(.
Please continue posting in the forum, you and other old members are invaluable to the group.


Yes, I agree wholeheartedly. Very grateful for Beagle's input

[FatTed]

Hi Beagle,

I am extremely grateful for your advise and take all your suggestions very very seriously. I have missed this because of lack of understanding of the Warrants:(.
Please continue posting in the forum, you and other old members are invaluable to the group.

Thanks,
Keerti

Same here, Look forward to your posts.

[exwesty]

From last month. KFLWF now bid 30 cents, nearly doubled in a month. I could very, very easily have bought all the warrants on offer at 16.5 cents but I chose to magnanimously highlight this extremely lucrative opportunity for others. Going off some recent comments in the ATM thread I'd be easily forgiven for thinking I have a large number of haters.

I like to think I make a positive difference for people and try too but I think I am often misunderstood. Above is one of countless times over more than a decade and 17,000 posts I have tried to highlight opportunities for others benefit and to point out risks. Sadly...I think its well and truly overdue that I reassess how much time I spend on this forum.

March will be expensive, but hopefully lucrative. I'm sitting on 100K KFLWF. :D

[Beagle]

Thanks folks for your kind words.
Welcome to the forum exwesty. You are very well positioned :t_up:

[alokdhir]

Keeping in view the current trend of SP of KFL , MLN , BRM ...all Fisher funds managed companies doing identical services but in different markets ...like KFL is only NZ stocks , BRM is only Australia market and MLN is rest of the world minus NZ and Oz . All give quarterly PIE returns of 2 % of the average NAV of the quarter . Not to be confused with company dividends which comes from profits and free cash flows of the company . These PIE returns come from mostly capital returns as they have only about 25% as actual dividend income from their investments .

But it seems many investors are confusing these PIE quarterly returns as general company dividends . To make it more clear ...in a stagnant or slight down market with no further capital appreciation of their investment portfolio this will result in capital investment in these funds going down in value as every quarterly PIE return will result in faster NAV erosion thus capital depreciation

Thats why premium to NAV being paid by investors is directly related its SP and not anything else ...BRM at 22% premium to NAV , MLN at 14 % premium and KFL at 9% premium .

BRM SP = 0.99 MLN SP = 1.29 KFL SP = 2.01

It seems many investors do not fully understand this quarterly PIE returns concept ...ie 2% NAV returned as dividend .

This works very well in a rising market as u dont get to know your original investment depreciation but in other case this will result in capital loss !

Now paying 22 % over NAV can mean your original capital may not rise for next 2 years even when markets go up 15 % each year or even more

IMHO this trend is not going to end well for many many ....

[SPC]

So what to attribute Carmel Fisher's buying of BRM and MLN over the last few weeks?.
I don't disagree with you...beats me..

[alokdhir]

So what to attribute Carmel Fisher's buying of BRM and MLN over the last few weeks?.
I don't disagree with you...beats me..

Carmel is a high earner ...going on high tax bracket from next year for all her direct company investments ...She needs to pay 39 % tax on direct company dividends ..ie extra 6 % after 28 % + 5% DRWT .

So for her it still makes sense to convert her other personal company shares to PIE income funds .

To her it doesn't matter small pittance extra ...but to small investors like us even paying 5 cents extra pinches ...:D

[kiora]

I have been thinking along the same lines as alokdhir for a while now regarding how it will end for all their funds.
I invested in their KS & listed funds in the early days but switched a few years ago.

For a portfolio for someone approaching retirement with little savings(not me) I split a third of the funds into 5 listed shares in 2007 at $10,000/share

2007 $10,000 MLN value now $9520.It has received quarterly dividends of around
8.5 c/year https://marlin.co.nz/assets/Uploads/Marlin-Dividend-History.pdf
Adds about $10,400 ?
Total value $19920 slightly more if dividends were reinvested
According to the investor center value would be around $33000 now
https://marlin.co.nz/investor-centre/portfolio-performance/
2007 $10,000 IFT value now with DRP $46,367 plus a few other dividends
As it turns out 2007 was a good time to invest in IFT
https://infratil.com/for-investors/
2007 $10,000 FPH value now with DRP $136,360

It would be interesting to have done the same with MFT & EBO in hindsight

[alokdhir]

I have been thinking along the same lines as alokdhir for a while now regarding how it will end for all their funds.
I invested in their KS & listed funds in the early days but switched a few years ago.

For a portfolio for someone approaching retirement with little savings(not me) I split a third of the funds into 5 listed shares in 2007 at $10,000/share

2007 $10,000 MLN value now $9520.It has received quarterly dividends of around
8.5 c/year https://marlin.co.nz/assets/Uploads/Marlin-Dividend-History.pdf
Adds about $10,400 ?
Total value $19920 slightly more if dividends were reinvested
According to the investor center value would be around $33000 now
https://marlin.co.nz/investor-centre/portfolio-performance/
2007 $10,000 IFT value now with DRP $46,367 plus a few other dividends
As it turns out 2007 was a good time to invest in IFT
https://infratil.com/for-investors/
2007 $10,000 FPH value now with DRP $136,360

It would be interesting to have done the same with MFT & EBO in hindsight

Great post of actual experience and figures ...as I also invested my original funds 1/3 each in BRM / MLN / KFL

Out of frustration because of poor returns moved all to KFL

Still I would have done 5 times better by investing direct in their own main stocks like FPH / MFT .

So I agree with you fully ...lure of 2% PIE returns of NAV quarterly can lead to silly investments

DYOR ....Cant follow anyone ...including Ms Carmel Fisher !! :eek2:

[Beagle]

I have been thinking along the same lines as alokdhir for a while now regarding how it will end for all their funds.
I invested in their KS & listed funds in the early days but switched a few years ago.

For a portfolio for someone approaching retirement with little savings(not me) I split a third of the funds into 5 listed shares in 2007 at $10,000/share

2007 $10,000 MLN value now $9520.It has received quarterly dividends of around
8.5 c/year https://marlin.co.nz/assets/Uploads/Marlin-Dividend-History.pdf
Adds about $10,400 ?
Total value $19920 slightly more if dividends were reinvested
According to the investor center value would be around $33000 now
https://marlin.co.nz/investor-centre/portfolio-performance/
2007 $10,000 IFT value now with DRP $46,367 plus a few other dividends
As it turns out 2007 was a good time to invest in IFT
https://infratil.com/for-investors/
2007 $10,000 FPH value now with DRP $136,360

It would be interesting to have done the same with MFT & EBO in hindsight

Hindsight is always 20/20 and often as useless as a fortune cookie in predicting the future. All funds have well and truly beaten their respective indices after all expenses, fees and taxes over the last few years. You can't realistically ask for more than that.

[justakiwi]

When will the warrants exercise price be announced? Will it be before​ the exercise date?

[777]

When will the warrants exercise price be announced? Will it be before​ the exercise date?

Well before as the paperwork will be sent out showing it. Would expect it to be $1.51.

The last lot with exercise date of 12/7/19 was announced on 17/6/19.

[justakiwi]

Thanks! :)


Well before as the paperwork will be sent out showing it. Would expect it to be $1.51.

The last lot with exercise date of 12/7/19 was announced on 17/6/19.

[Beagle]

Hindsight is always 20/20 and often as useless as a fortune cookie in predicting the future. All funds have well and truly beaten their respective indices after all expenses, fees and taxes over the last few years. You can't realistically ask for more than that. Posted 27/11/2020
Update. These have been trading at quite a substantial premium to NTA, latest share price $2.04 at time of posting and last reported NTA was $1.85 as at last Wednesday, (and the market has dropped a fair bit since then).

I do not feel such a premium is warranted. I would not be concerned if the premium was 2-4% but it is currently well north of 10%, (adjusted for warrant exercise) and I feel that is unjustified as KFL have not outperformed their benchmark as much as the other funds Barrmundi and Marlin. I made my own assessment over the holidays that the warrants were not worth the 44-45 cents they were priced at, (at one point), and sold them all.

I remain of the view that the Barrmundi warrants are an excellent hold at around 21 cents.

Good luck to holders.

[justakiwi]

So you are choosing not to exercise any KFL warrants in March? If exercise price is around $1.51 as estimated, surely that’s a decent discount even if the SP was down to where you feel it should be?

Just curious as I plan to exercise the few warrants I have.


Update. These have been trading at quite a substantial premium to NTA, latest share price $2.04 at time of posting and last reported NTA was $1.85 as at last Wednesday, (and the market has dropped a fair bit since then).

I do not feel such a premium is warranted. I would not be concerned if the premium was 2-4% but it is currently well north of 10%, (adjusted for warrant exercise) and I feel that is unjustified as KFL have not outperformed their benchmark as much as the other funds Barrmundi and Marlin. I made my own assessment over the holidays that the warrants were not worth the 44-45 cents they were priced at, (at one point), and sold them all.

I remain of the view that the Barrmundi warrants are an excellent hold at around 21 cents.

Good luck to holders.

[FatTed]

So you are choosing not to exercise any KFL warrants in March? If exercise price is around $1.51 as estimated, surely that’s a decent discount even if the SP was down to where you feel it should be?

Just curious as I plan to exercise the few warrants I have.

At what price is it better to exercise the warrants and sell the shares as opposed to just selling the warrants? Mr B told us he bought them at 6c

[justakiwi]

If one had the money to buy up a large number of warrants @ $0.06 each, one could make a significant profit selling them down the track @ $0.41 (today’s price). Mr B no doubt did very nicely. But warrants issues can be risky and there are no guarantees the warrant price will do what these have. Having said that, I seriously wish I had bought a few ;)

One could choose to do as you suggested - exercise the warrants, keep the cost of exercising, and sell the rest at a “profit”, but again, you need to have a fair few to warrant doing that. I think it is more about how many you hold than what the price is - if I were to do that with my very small number of warrants, I might make $250 profit, but keeping those shares would be more beneficial to me in the long run.


At what price is it better to exercise the warrants and sell the shares as opposed to just selling the warrants? Mr B told us he bought them at 6c

[alokdhir]

At present with KFL current NAV around 1.84 ( coming Thursday's ) thus making its diluted NAV less at least 6 cents further ...total premium of around 25 cents via KFL shares and thru warrant route its premium of 12 cents !!

This is very steep premium to pay for trying to get regular income as when situation will change in about years time then SP of KFL will most likely revert to its long term ways ie 2-3 cents discount .

Loosing 25 cents for 12-15 cents of dividends doesn't look very appealing .

Warrants fair price should be close 30-32 cents IMHO

[Beagle]

FYI - I estimate the current NTA of KFL at $1.81, (market has moved down since last Wednesday) and fair value of the warrants is currently about 30 cents.
These are fair values based on NTA but the market is currently attributing a large premium to NTA to KFL shares. Whether this sized premium is an enduring phenomenon remains to be seen.

If I was in your situation Justakiwi it might be worth exercising them and seeing if the shares stay at about the current level in which case $1.51 + 0.41 = $1.92 and with the shares at $2.03,, you could do pretty well.

[justakiwi]

That’s my plan. I am only exercising my allocated warrants - I didn’t buy any extra, so cost to me is just the exercise price. Best way for me to build my holding, along with DRP. I’m happy.



If I was in your situation Justakiwi it might be worth exercising them and seeing if the shares stay at about the current level in which case $1.51 + 0.41 = $1.92 and with the shares at $2.03,, you could do pretty well.

[Beagle]

That’s my plan. I am only exercising my allocated warrants - I didn’t buy any extra, so cost to me is just the exercise price. Best way for me to build my holding, along with DRP. I’m happy.
A good way to build wealth over time.

[Beagle]

Doing well and beating the index http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/KFL/366417/339009.pdf

[alokdhir]

Just checked again with company ....Warrant converted KFL not eligible for March divvy as allotment date is 17th March which is after ex divvy date of 13th March !!!

So thought to let all warrant holders and buyers to know this info ...divvy is expected to be around 3.75 cents for March qtr

Warrant converted KFL gets first divvy in June qtr

[winner69]

Well that premium to NV which got to 13% just over a month ago has dissipated pretty quickly - now shareprice is a fraction over NAV

Suppose something to do with impending warrant conversion....if all converted lowers NAV to about $1.80 (I think)

So is the 'premium' adjusting to the the lower NAV - would still be 6%

Kingfish gurus = how have things played out at previous conversions?

Just wondering if we will see KFL bak trading at a discount to NAV

[alokdhir]

Well that premium to NV which got to 13% just over a month ago has dissipated pretty quickly - now shareprice is a fraction over NAV

Suppose something to do with impending warrant conversion....if all converted lowers NAV to about $1.80 (I think)

So is the 'premium' adjusting to the the lower NAV - would still be 6%

Kingfish gurus = how have things played out at previous conversions?

Just wondering if we will see KFL bak trading at a discount to NAV

Normally it would have been around 10-15 % discount around this time of the warrants exercise time line ....but keeping in view the strong retail participation due to the demise of term deposits as regular income its just about back to NAV levels

So in my view its still around 10-15% premium to regular levels what should have been ...here market correction also played a role to help close the gap fully .

IMHO this premium will return after warrants conversion done and dusted and markets recovering from these corrected levels . This is a good opportunity to invest in KFL at very reasonable levels for regular income part of your portfolio at least . KFL always does very well after warrants conversion

[Beagle]

Adjusting the last reported NAV for estimated index decline of 2.5% since then gives me an estimated closing NAV today of $1.82.
Adjusting for the pending warrant issue and assuming all warrant holders exercise @ $1.51 I see that reducing NAV by ~ 6 cps to fair value of $1.76.
Fair value of shares carries rights to the pending distribution in March of an estimated 3.8 cps so NAV fair value ex divvy adjusted for warrant exercise is ~ $1.72
Warrant exercise does not confer rights to the pending dividend so fair value of warrants = $1.72 - $1.51 = 21 cents.

Anything above those figure which the shares or warrants are trading at is the premium to fair value, e.g. shares closed today at $1.90, NTA estimated, adjusted value for warrants = $1.76 = 8% premium.

If I recall correctly there was a bit of a bonanza at the last warrant conversion as the warrants were trading at one point at a 13% discount to fair adjusted value pending exercise

Whether the shares and warrants are worth the premium to estimated adjusted NTA is up to each investor to decide for themselves. If anyone's interested, a few posts back I noted what I had done in regard to my warrants.

The premium these are trading at suggests to me there's a large number of investors chasing the PIE tax paid dividends of 8% per annum. I note significant premiums in Barramundi and Marlin.

[justakiwi]

Anyone know when shares from exercised warrants will be allocated? Thought it was supposed to be today.

[Beagle]

https://kingfish.co.nz/documents/general/offer-kfl-kingfish---offer-documentation-released-316264.pdf 17 March.

[justakiwi]

Ah, thanks. I did google it but the info I found had no allotment date.


https://kingfish.co.nz/documents/general/offer-kfl-kingfish---offer-documentation-released-316264.pdf 17 March.

[FatTed]

When the new tax rate of 39% comes in April for those so lucky, will these funds (KFL and BRM) be more tax efficient, does it mean that it may be worth buying these shares above NAV?

[alokdhir]

When the new tax rate of 39% comes in April for those so lucky, will these funds (KFL and BRM) be more tax efficient, does it mean that it may be worth buying these shares above NAV?

Now they save 11 % instead of 5% before of tax for high income earners ...so extra 6% savings from April onwards ...maybe worthwhile for such high earners to pay one time premium for all future year savings of 11% tax

[justakiwi]

KFL was my first purchase back in 2016 and it has served me very well. I have taken advantage of warrants issues and DRP to grow my small holding, and my annual total return has been in the vicinity of 24%. I have never bought any additional shares on market and have no plans to do so. I just sit on it and let it go it's thing and I have not been disappointed.

[alokdhir]

Being a holder in all Fisher listed funds since 2010 ...I can say KFL has done the best out of the lot and it has done very well for me . I also take DRP and sell on market for my regular retired income requirements .

Since last Nov they all have gone at substantial premium to market ...Highest being BRM and lowest for KFL ...it seems market is trying to price them based on 6-7% dividend yield instead of NAV based .

Doesn't look like premium will go away soon as it suits regular income retirees as well as high income earners on 39% incremental tax rate . Being a listed PIE there dividends are taxed at 28% final ...as well no need include there income in IR3 if it suits individual investor . So they have very distinct tax advantages over direct investments for some .

Overall KFL is very well managed with exceptional track record ...fully recommend as a very satisfied investor since 2010

[Ohdoyle]

Had a long hard think about this (and BRM and MLN) and I just can't justify paying the premium.

I think I will DIY it for now and see how and feel in a couple of years.


While I accept a small premium could be justified for some investors due to the PIE status it doesn't justify a 8% one overall to my mind.

Plus if someone is wanting the PIE status then why not invest in a managed fund direct. I realise there are advantages to a closed listed fund but I don't see them justifying that sort of premium.

Only time will tell if I make the right decision, but if KFL returns closer to NAV then I'll have another look at them then. In the meantime Id like to think that with the savings on fees and the NAV Premium I should be able to outperform them managing it myself. Only time will tell of course.

Noting that for the situation I was looking at (Income investing for my retired mother) there is no real tax advantage to the PIE status.

I may look at some of the other options like TCL or HFL to get some international exposure. But in the meantime the premium moves closer to say 2 percent or so I can't see this one as being for me.

[alokdhir]

Whats the buzz on KFL ? Why suddenly so much interest in it ?

Any news about new warrant issue ? Or people just preparing well ahead :confused:

[Grimy]

CNU010 paying back $400,000,000 tomorrow already looking for a home?..........

[alokdhir]

Why KFL lagging behind its other cousins BRM and MLN in premium over NAV department ...after all it also has all the qualities and features of other 2 ??

[Grimy]

I think the real question is why are BRM and MLN priced so far over their NAV.........I don't want KFL to get that far ahead of its NAV.

[SPC]

I'm putting it down to new entrants. Maybe the sharsies crowds or similar cohort. Div yields at 4 to 5% is all they read.. Size of trades suggests same.

[Sideshow Bob]

I'm putting it down to new entrants. Maybe the sharsies crowds or similar cohort. Div yields at 4 to 5% is all they read.. Size of trades suggests same.

Or probably the PE stated on the NZX website at 7.05.

[justakiwi]

Or maybe they’re just selecting three very well managed companies which afford them global and sector diversity. Three companies which are well established and provide a way for them to invest in many companies without having to manage them themselves. Three companies that pay decent dividends, have a DRP option, regular warrants issues - all of which helps them grow their holdings without any additional capital expend if that’s what they prefer. An alternative option to ETFs perhaps.

It puzzles me how people get so agitated by “unusual” share price events, when we all know that SP is next to meaningless. The market sets the SP. Why does it bother you? If you have a large holding - it’s an opportunity to cash out a few $ to use elsewhere if you wish. if, like me, you’re a long term holder, you just watch with interest but know that things will change, as they always do. But from a long term perspective, it seems to me that the Fisher trio will be a positive investment for those of us who hold.

[Sideshow Bob]

I understand the ease and advantages of holding the different Fisher Funds, and have been a holder in the past. It is actually pretty easy to largely replicate these holdings.

Take KFL for example, which is easily their biggest fund. All NZX holdings, their biggest 5 holdings currently represent 64% of the fund and the rest of their holdings are here. Investor Centre | Portfolio Holdings | Kingfish Limited NZ (https://kingfish.co.nz/investor-centre/portfolio-holdings/)

With the advent of Sharsies or other low-cost platforms makes it easy to have a portfolio largely mirroring this. Of course KFL are a little more active, buying/selling at different times - and for example with A2 they have sold down over recent months. But hey, you've got to earn your management fees somehow.

A cynic would say about the dividends not really being dividends (at least some of the time through its existence) but more returns of capital gains. Then you have the warrants to keep the money coming back in that has been paid out......or this this just being cynical?? :confused:

They are another option for investment, good track record, PIE status, diversified, easy etc.

JK - I don't know if posters are "agitated" as such by the share price. Just probably puzzled why someone would pay $2.02 for something worth $1.81.....that they can go out and buy for $1.81.

[justakiwi]

I get where you re coming from and I agree - I wouldn’t pay $2.02 for them. But on any given day, they are worth what the market is prepared to pay for them. Which is why I say SP means very little. Today’s SP is really only relevant if you are planning to buy or sell today. If you’re not intending to do that, the SP means nothing.

SP doesn’t indicate a “good” company or investment. It simply reflects what buyers and sellers are choosing to do on the day.






JK - I don't know if posters are "agitated" as such by the share price. Just probably puzzled why someone would pay $2.02 for something worth $1.81.....that they can go out and buy for $1.81.

[Sideshow Bob]

Kingfish delivers a record result - NZX, New Zealand’s Exchange (https://www.nzx.com/announcements/372989)

Results for announcement to the market

Name of issuer Kingfish Limited
Reporting Period 12 months to 31 March 2021
Previous Reporting Period 12 months to 31 March 2020
Currency NZ$
Amount (000s) Percentage change

Revenue from continuing operations $155,966 +1,918%
Total Revenue $155,966 +1,918%
Net profit/(loss) from continuing operations $142,713 +8,092%
Total net profit/(loss) $142,713 +8,092%
Interim/Final Dividend
Amount per Quoted Equity Security $NZ 3.60 cents per share
Imputed amount per Quoted Equity Security $NZ 0.00072607

Record Date 10 June 2021
Dividend Payment Date 25 June 2021

Current period Prior comparable period

Net tangible assets per Quoted Equity Security $1.77 $1.39

A brief explanation of any of the figures above necessary to enable the figures to be understood The financial statements attached to this report have been audited by PricewaterhouseCoopers and are not subject to a qualification. A copy of the auditor’s report applicable to the financial statements is attached to this announcement.
Authority for this announcement
Name of person authorised to make this announcement W.A. Burns
Contact person for this announcement W.A. Burns
Contact phone number (09) 4840352
Contact email address enquire@kingfish.co.nz
Date of release through MAP 27 May 2021
Audited financial statements accompany this announcement.

For immediate release:
27 May 2021

Kingfish delivers a record result

•Net profit after tax for year ended 31 March 2021 $142.7m
•Total shareholder return * +65.1%
•Adjusted NAV return (after expenses, fees and tax) ** 41.1%
•Dividend return *** +7.7% (13.48cps)

NZX-listed investment company Kingfish Limited (NZX:KFL) today announced a net operating after tax profit for the year ended 31 March 2021 of $142.7 million, in contrast with last year’s COVID-19 impacted profit of only $1.7 million. The result, driven by the recovery of key portfolio stocks, demonstrates the sharemarket recovery post the initial COVID pandemic shock, which had materially impacted Kingfish’s prior year March 2020 result.

Key elements of the FY21 result include gains on investments of $150.5m, dividend and interest income of $5.4m, offset by fees and expenses of $13.2m.

The Kingfish portfolio achieved a gross performance return**** before fees and expenses of +46.0% and an Adjusted net asset value (NAV) return** of +41.1%, compared to the S&P/NZX50G which reported +28.2% for the 12 month period. Total shareholder return* of +65.1% included share price increase, dividends paid, and the impact of the warrants that were exercised during the year.

In accordance with Kingfish’s quarterly distribution policy (2.0% of average NAV per quarter), the company paid a total of 13.48 cents per share to shareholders during the year ended 31 March 2021. On 27 May 2021, the board declared a dividend of 3.60 cents per share, payable on 25 June 2021 with a record date of 10 June.

Chair Alistair Ryan said “Kingfish has experienced a year of recovery after the COVID impacted performance of the previous financial year. The Manager’s focus on investing in quality and growing companies has again demonstrated the benefits of active investment management and rewarded shareholders with very strong returns.”

Kingfish’s Manager, Fisher Funds, will be paid a performance fee of $6.2m plus GST, as the Kingfish portfolio achieved a return in excess of both the performance fee hurdle (the change in the Bank Bill Index rate plus 7%) and the High Water Mark (the highest net asset value at the end of the previous financial year in which a performance fee was paid, adjusted for changes in capital). The performance fee earn rate was renegotiated down from 15% to 10% in FY19 and capped at 1.25%. The performance fee cap applies for FY21.

Senior Portfolio Manager Sam Dickie noted that “It is rare as investors that we get to test our investment process in very different market conditions over the course of a year. It was pleasing to see Kingfish outperform the benchmark index in each of the distinct market phases.”

For further information please contact:

Corporate Manager
Kingfish Limited
Tel: (09) 484 0352

[Sideshow Bob]

.............

[justakiwi]

This is why some of us are willing to break our own investing rules, and accept the high management/performance fees. As long as they continue as they have been, I’m a happy long term holder.

[winner69]

As of yesterday 17% premium to NAV

Must be a record high?

[Beagle]

I think that is a record. Just a thought...its really easy to replicate their KFL holdings and relative weightings and there are no overseas tax implications to worry about, unlike with replicating Barramundi and Marlin portfolio's which will involve purchasing shares on overseas bourses and considerable CFC and FIF accounting compliance work, (much harder).

That said, I can understand why people have stuck with them over the years, its easy diversification, tax free distributions of 2% per quarter, regular warrant issues, nice lunch at the annual meeting and last but certainly not least, decent market outperformance (even after fees and expenses) in recent years.

[tango]

I think that is a record. Just a thought...its really easy to replicate their KFL holdings and relative weightings and there are no overseas tax implications to worry about, unlike with replicating Barramundi and Marlin portfolio's which will involve purchasing shares on overseas bourses and considerable CFC and FIF accounting compliance work, (much harder).

That said, I can understand why people have stuck with them over the years, its easy diversification, tax free distributions of 2% per quarter, regular warrant issues, nice lunch at the annual meeting and last but certainly not least, decent market outperformance (even after fees and expenses) in recent years.

I have used that strategy about 20 years ago. I bought into MFT, RYM, FRE and a couple of other stocks that KFL were bullish on. Never regretted it. Sold MFT too early but that's life

The premium to NAV is eye watering but people want the 8% dividends and have nowhere else to park their money

I see SPK has an attractive div yield if that's what you are chasing

[alokdhir]

Expecting to see KFL new warrant issue announcement in coming qtr ...July to Sept . So now maybe the time premium starts expanding slowly to peak before it goes ex - warrant .

[justakiwi]

Can someone please help me understand this? The $0.15 DRP remainder from previous dividend + the $1.95 DRP remainder carried forward, equals more than the strike price. Shouldn’t they have given me 44 shares? Sharesight thinks so :confused:;)

12664

[winner69]

Can someone please help me understand this? The $0.15 DRP remainder from previous dividend + the $1.95 DRP remainder carried forward, equals more than the strike price. Shouldn’t they have given me 44 shares? Sharesight thinks so :confused:;)

12664

On the face of it seems that 44 shares

But I think it's all about calculations being done to 4 decimal points

Bloody maths eh

The 85.64 plus 0.15 from last time is 85.79 which entitles you to 43.9998 shares ...so 43 is what you get and the .9998 is carried forward to next time

If next DRP is 2.4o say you won't be getting that extra share then either:( .....

[justakiwi]

Clearly not a big deal as only one share, but in principle I think it kind of sucks. Thanks!


On the face of it seems that 44 shares

But I think it's all about calculatons being done to 4 decimal points

The 85.64 plus 0.15 from last time is 85.79 which entitles you to 43.9998 shares ...so 43 is what you get and the .9998 is carried forward to next time

If next DRP is 2.4o say you won't be getting that extra share then either:( .....

[Beagle]

At least they carry forward remainder credit for part shares to be allocated in the future, many companies don't !

[alokdhir]

MFT up almost 10% since the lockdown ....FPH more then that ....IFT is holding steady ....thats almost 52% of KFL holdings ....So maybe KFL NAV will jump big time on coming Thursday ....Expecting around 1.85 maybe !!!

[Sideshow Bob]

MFT up almost 10% since the lockdown ....FPH more then that ....IFT is holding steady ....thats almost 52% of KFL holdings ....So maybe KFL NAV will jump big time on coming Thursday ....Expecting around 1.85 maybe !!!

And trading at $2.00......

Pretty easy to replicate in your own portfolio with almost the exact mix.

[alokdhir]

And trading at $2.00......

Pretty easy to replicate in your own portfolio with almost the exact mix.

Still trading at 12% premium ....must be some advantages to some ...

[alokdhir]

3.52 cents dividend also round the corner !! KFL is a great long term hold :t_up:

[Beagle]

Still trading at 12% premium ....must be some advantages to some ...

3.52 x 4 = 14.08 / 200 = 7.04% PIE tax paid return. Most people could live quite comfortably off $1m invested giving 7% net = $70,000 tax free per annum.

[alokdhir]

3.52 x 4 = 14.08 / 200 = 7.04% PIE tax paid return. Most people could live quite comfortably off $1m invested giving 7% net = $70,000 tax free per annum.

Fully agree and thats what is supporting my retirement ....Its the best buy and hold of my life ...tax free plus no need include or file IR3 ...so total buy and forget and just enjoy direct credits every 3 months to bank ....what more a retired person need for financial security !! :t_up:


PS : Capital is not only preserved well but appreciates also most of the years

[Onion]

3.52 x 4 = 14.08 / 200 = 7.04% PIE tax paid return. Most people could live quite comfortably off $1m invested giving 7% net = $70,000 tax free per annum.

All the MLN, KFL and BRM funds appear to be priced to return about 7% at present. Based on a dividend of 8% of NTA.

[SPC]

I've been retired for years on a large portfolio of this trifecta along with a healthy slice of LPTs. I didn't pay today's prices either so the NTA yield is considerably higher.
I'm not even 60. Of course the imputation credits are wasted in my case, but umm you have to make profits to get any in the first place of course.
The critics normally chime in here...

[ronaldson]

If you have $1m invested you would take the DRP shares at 3% discount each quarter and concurrently sell on-market via Jarden or whoever. The brokerage is a reasonable sum less each quarter than the value of the discount. So tax free return is even higher.

[Beagle]

I've been retired for years on a large portfolio of this trifecta along with a healthy slice of LPTs. I didn't pay today's prices either so the NTA yield is considerably higher.
I'm not even 60. Of course the imputation credits are wasted in my case, but umm you have to make profits to get any in the first place of course.
The critics normally chime in here...
No argument from me. I like your strategy.


If you have $1m invested you would take the DRP shares at 3% discount each quarter and concurrently sell on-market via Jarden or whoever. The brokerage is a reasonable sum less each quarter than the value of the discount. So tax free return is even higher. Absolutely correct and would boost ones net return to 7.04% / 0.97 = 7.26% before brokerage costs.

[SPC]

Thanks Beagle. But Im not bragging. Like any real investor I've made big mistakes and I still live with some of these today but I keep these to remind me of the consequences of rash decisions and herd followment (new word) as a younger investor.
I follow these pages to question my own thinking and learn from others. I'm a better investor for it.
Still no Merc tho ;)..I'm still waiting on the business case...

[Beagle]

Yes...the age old conundrum. While its great to get an awesome return on one's money one is best not to lose sight of the fact that you can't take your money with you when you die.

Just for you mate, but maybe for me too ;) https://www.youtube.com/watch?v=WKrNCVSdefA

[SPC]

Yeah I know the Egyptians tried but they all got robbed, later.
I lasted 12 seconds on the vid sorry ;)

[Beagle]

Yeah I know the Egyptians tried but they all got robbed, later.
I lasted 12 seconds on the vid sorry ;)

Come on mate, you're not going to miss $200K. Just chump change ;)

[SPC]

Look I'll tell you story. When I was in my early 20s my dear ole dad who was an unqualified accountant gave me a piece of wisdom that I've never forgotten.
One day I had my head under the bonnet of some piece of British automotive ditritis (insert any name here..there were many) that we all drove in the 70s fixing yet another problem. My old man who was helping me said to me at the peak of my frustration " well son there are two types of people in life". I replied "who are they dad?". He took a long drag on his pipe, pausing for effect as was his style, and eventually replied..
" rich pedestrians...and poor motorists".
My course of my life changed that day..

[morphs]

Question from a comment that arose on the MFT thread about KFL distributions.


PS : Also capital gains for funds are clearly tax exempt while for individuals its taxable if trading . So KFL can pass on capital returns tax free as part of quarterly dividends

If KFL includes capital gain as part of a dividend payment doesn't it need to withhold tax on that distribution? Or is it a non-taxable part of the total distribution as implied in the quote? Just would like confirmation of how they make up their distributions.

[alokdhir]

Question from a comment that arose on the MFT thread about KFL distributions.



If KFL includes capital gain as part of a dividend payment doesn't it need to withhold tax on that distribution? Or is it a non-taxable part of the total distribution as implied in the quote? Just would like confirmation of how they make up their distributions.

Its dividend has two parts ...Excluded Income with not any imputation credits attached ...this is capital returns part ...Not Taxable as per note written on dividend advise

Second part is dividend which has imputation credits attached @ 28% which can be included in IR3 if it suits u or this also left out if u are an individual NZ resident as per note on the dividend advise

Hope that clarifies

[FatTed]

No argument from me. I like your strategy.

Absolutely correct and would boost ones net return to 7.04% / 0.97 = 7.26% before brokerage costs.

Would you then have to pay tax at 36% on that/

[Onion]

Would you then have to pay tax at 36% on that/

(I think…) Only if the original intent of the investment was for capital gains. If the intent was to derive income then the PIE tax regime takes care of things.

[alokdhir]

Would you then have to pay tax at 36% on that/

As u r selling your DRP ie Dividend Reinvestment Plan shares only which were given at 3% discount in lieu of dividend ...No further tax need paid on its sale proceeds IMHO ...I am no tax expert and not giving tax advise please .

[Beagle]

Would you then have to pay tax at 36% on that/

You raise a good question, thank you. Doesn't apply to me as I simply build up my shares but if someone is taking shares in lieu of dividend with the express intention of immediately reselling them and working the 3% discount for a quick gain on sale, it follows that their express intention was to acquire shares with the immediate purpose to sell them at a 3% profit (or thereabouts depending upon market share price on the day of sale) and therefore the gains made are taxable income as the intent behind the acquisition and disposal of the shares is crystal clear and was done for profit.

[SPC]

When you are in a DRP you still receive initially a cash div but the company uses the cash to purchase a certain number of shares to you and you forfeit the cash. The new shares are technically a Buy and should be recorded as such in your portfolio management system.
Buying to Sell in a short time frame is taxable activity but keeping the shares for say 6 months would probably pass.
'Intention' is everything to IRD and it's up to you to self declare what you're doing.

[ronaldson]

My practice is to sell, mostly after the ex date, enough shares to satisfy my requirements for funds to expend. Clearly the shares sold are not those " bought " via the dividend as they are in fact not yet allotted or issued, and the number sold need not exactly equate the future anticipated dividend receipt. The cash actually comes in at T + 2 in the normal manner after the sale is made. But I also disagree that the company uses "the cash" to purchase a certain number of shares " to you ".The DRP shares are always new allotments ( increasing the companies total equity shares on issue and requiring a Capital Change Notice announcement to NZX ) or transfers made from treasury stock ( ie shares in its own stock already held by the company ) although some companies do, in a relatively short window of time, buy the equivalent shares on market as new treasury stock to avoid the dilution effect.

You can get confused because of the way your broker ( eg Jarden ) sets up it's IT to create the ability for you to display your portfolio of holdings. To add DRP shares received to your existing holding you do apply " Buy " from the drop down box of options.

[alokdhir]

Even if u sell after getting your DRP shares to the amount needed its not simple 3% difference which is short term trading profit income because of FIFO rules of IRD ....First in first out will make sure that capital gains income will be counted from your original lot share price ....IMO

[Beagle]

Interesting discussion. One idea might be to take shares in lieu of dividend each quarter and once a year sell enough shares that may or may or may not approximate the total shares in lieu of dividend issued during the previous 12 months, but sell whatever you need for income to live on.

If one followed such an approach, (which in no way I am guaranteeing is tax free), on a trifecta of holdings in the KFL, BRM and MLN companies you'd get three lots of income per annum which could be managed to be 4 months apart and still ostensibly take advantage of the 3% shares in lieu of dividend discount. Just an idea...for what its worth.

If its all too hard just take the cash each quarter.

[alokdhir]

Interesting discussion. One idea might be to take shares in lieu of dividend each quarter and once a year sell enough shares that may or may or may not approximate the total shares in lieu of dividend issued during the previous 12 months, but sell whatever you need for income to live on.

If one followed such an approach, (which in no way I am guaranteeing is tax free), on a trifecta of holdings in the KFL, BRM and MLN companies you'd get three lots of income per annum which could be managed to be 4 months apart and still ostensibly take advantage of the 3% shares in lieu of dividend discount. Just an idea...for what its worth.

If its all too hard just take the cash each quarter.

Also possible if it suits individual to use imputation credits attached to offset small gains from 3% discount . Most of the listed PIEs imputation credits are not used by investors as they dont need too . But may lead to lots of paperwork for small gains

Here its noteworthy that included part of income from them is very minuscule compared to total payouts ...so even if u getting say $ 100,000 dividends out of them ....Actual included income with imputation credits attached maybe just $ 25000 ...all taxed @ 28% ...leading to excess credits if u dont have any other incomes to boost your slab rates

[ronaldson]

Potentially also relevant to this discussion is the practice of the NZ Share Registries, Computershare and Link respectively, and the Holder Statements they issue reflecting changes to a customer account.

Computershare records a Buy addition to a holding as " Purchase " and a Sale subtraction as " Sale ". In neither case is the price at which the transaction occurred recorded ( or, given a transaction can be concluded at more than one price via a series of partial fills, the averaged price ). You have to refer to your own Contract Note from your broker to identify that. On the other hand an acquisition via a DRP is recorded as " Reinvestment " and the price at which the shares were acquired IS helpfully stated ( the same as it is on the related Dividend/DRP Notice ).

Link Market Service simply record both Buy and Sell transactions as " NZX Trading " although it is of course clear from the Holder Statement numbers whether you bought or sold. Again the price at which that transaction occurred is not shown. I don't have access to a Link Holder Statement where a DRP is offered and taken but the practice is likely to follow that of Computershare, because logically it can't be referenced as " NZX Trading ". Technically there is no " Buyer " and of course no " Seller " either involved in being allotted DRP shares.

Unless you are a Trader for IRD purposes ( and I have a Company to do that activity ) I can't see that selling a portion of your personal shareholdings at any time for funds for living expenses or to meet commitments means you derive taxable income.

[kiora]

The Company has already paid the tax on your dividend and the IRD already this & how much
https://www.ird.govt.nz/income-tax/withholding-taxes/resident-withholding-tax-rwt/payers/investment-income-reporting/reporting-requirements/payers-of-dividends---reporting-requirements

[alokdhir]

With KFL nav up 8 cents in last week ...SP is also following nav ... It getting big help from MFT / SUM last week....now FPH and IFT should bring it up next week

Its portfolio is perfect for all seasons ...has all flavours for every taste . :p

MFT not done yet ...MFT = $ 100 is KFL = $ 2.15 :t_up: