KFL - discount to diluted NAV

[ronaldson]

Yes, 8.4cps increase in NAV in a week is remarkable. Won't be many times in the past that has been the case! Goes ex dividend on 8 September.

[alokdhir]

Maybe next weeks NAV jumps to all time high of 1.92 ...at that time SP of KFL was 2.13 !!!

MFT + FPH can help reach there soon

3.52 cents dividend also very attractive at the moment ...maybe it will help it reach 2.10 by 8th Sept .

[ronaldson]

KFL has an interesting strategy for the computation of dividend, paying 2% of NAV each quarter regardless of whether a rising or falling market/NAV. You are right the current quarterly dividend (yet to be paid, but cum div if you buy on or before 7 September ) is 3.52cps. I believe the highest quarterly dividend ever paid in the past has been 3.60cps, and the last reported NAV would support an even higher payout than that in the next quarter, if maintained.

It is sort of self-adjusting, because paying the dividend itself reduces the then current NAV.

[alokdhir]

KFL has an interesting strategy for the computation of dividend, paying 2% of NAV each quarter regardless of whether a rising or falling market/NAV. You are right the current quarterly dividend (yet to be paid, but cum div if you buy on or before 7 September ) is 3.52cps. I believe the highest quarterly dividend ever paid in the past has been 3.60cps, and the last reported NAV would support an even higher payout than that in the next quarter, if maintained.

It is sort of self-adjusting, because paying the dividend itself reduces the then current NAV.

Most likely it will keep rising till 8th Sept ....210 coming soon :t_up:

[alokdhir]

Most likely it will keep rising till 8th Sept ....210 coming soon :t_up:

210 come and today last day of with Dividend of 3.52 cents . Tomorrow its ex dividend .

[daveypnz]

Looks like major resistance at 2.10 and with divvy being paid I'd say she takes a breather from here.

[alokdhir]

Normally it doesn't loose full value after going ex ...so 208 tomorrow is actually 2.115 todays

[777]

New warrants issue out. KFLWG.

[alokdhir]

12 the Nov Ex date ....2.03 minus expected 14 cents divvy = 1.89 likely exercise price on 18th Nov 2022 ...

Overall its a very attractive offer and should have keen interest

[Beagle]

12 the Nov Ex date ....2.03 minus expected 14 cents divvy = 1.89 likely exercise price on 18th Nov 2022 ...

Overall its a very attractive offer and should have keen interest

Used to be rich pickings, (I got a bit fat on a size of some of the feeds) when these warrants within the overall Kingfish group started trading but sadly these days it seems people are far more aggressive with growth assumptions and if the most recent Marlin warrant listing is anything to yardstick against these warrants will start trading well above their intrinsic value.

I will run my dog food sniffer nose over them looking for a feed a little closer to listing date but I am not going to hold my breath.

Shares currently trading circa 10% above NTA and very easy to replicate their modestly diversified portfolio so that's pretty boring too.

[alokdhir]

Used to be rich pickings, (I got a bit fat on a size of some of the feeds) when these warrants within the overall Kingfish group started trading but sadly these days it seems people are far more aggressive with growth assumptions and if the most recent Marlin warrant listing is anything to yardstick against these warrants will start trading well above their intrinsic value.

I will run my dog food sniffer nose over them looking for a feed a little closer to listing date but I am not going to hold my breath.

Shares currently trading circa 10% above NTA and very easy to replicate their modestly diversified portfolio so that's pretty boring too.

Good part about these warrants is that they will get allotted on 23rd Nov 2022 and they are immediately eligible for Dec qtr dividend ...that will make them 3.6 Cents dearer as u are going to get almost 3.6 cents dividend back in 30 days time ...so the timing is great for warrant holders unlike last time when they had to wait almost 105 days before getting 1st divvy .

[Beagle]

Good part about these warrants is that they will get allotted on 23rd Nov 2022 and they are immediately eligible for Dec qtr dividend ...that will make them 3.6 Cents dearer as u are going to get almost 3.6 cents dividend back in 30 days time ...so the timing is great for warrant holders unlike last time when they had to wait almost 105 days before getting 1st divvy .

Well spotted and yes the timing of the last issuance of shares on exercise of the previous issue of warrants was a bit unfortunate.

[alokdhir]

KFL coming closer to going ex warrants next wednesday as record date is 12th Nov .

Thats pulling the SP up ...

Maybe before going ex KFL will make new high of 215 ....Depends upon what market thinks is warrants worth...Surely worth 15 cents or more ?

[ronaldson]

Has anyone else noticed that KFL is not currently quoted by NZX as CE ( cum entitlement ) or CW ( cum Warrants, although there seems to be no letter W allocated for Warrants ) and presumably won't be quoted XE or XW after the record date but before allotment, either. The same situation apparently applies for all Warrant issues and strikes me as a flaw in NZX process/procedure which could be a trap for the unwary.

[alokdhir]

Last 3 days to buy KFL cum warrants ...Warrants listing expectations are about 15 cents IMO

[Beagle]

Last 3 days to buy KFL cum warrants ...Warrants listing expectations are about 15 cents IMO

I can see how you got to 15 cents easily enough and concur that around there is their theoretical value based on where the shares are currently priced. No issues so far. The real question though is will Kingfish shares continue to trade at a 10-11% premium to NTA all the way through to November 2022 ?

I can understand a premium to NTA for the better diversified Barramundi and Marlin portfolio's especially when their performance above the benchmark in the medium term has been superior and investment in these effectively deals with all the FIF drama's of direct overseas investment but for a bunch of NZX shares that are easily replicated without foreign exchange or FIF drama's is such a premium justified and far more importantly is the premium expected to be enduring ?

I'm not convinced so to me the real value of the warrants is considerably less than their theoretical value.

Another issue I have with KFL is their top 5 holdings makes up 66% of their portfolio as per 3/11/2021 weekly NTA update. Poor diversification or smart investing ?, you folks be the judge.

[ronaldson]

Today KFL have released a Quotation Notice to NZX recording that 79.1m Warrants will be allotted on Monday 15 November under ticker KFLWG, I believe tradable from Tuesday 16th.

Not sure that addresses my criticism last Sunday ( see above ) re the basis KFL have been quoted on NZX since 18 October when the warrant issue was initially announced, but may be now the KFL ticker will be shown as CE until the record date on Friday?

Certainly the Quotation Notice could have been issued weeks ago, but perhaps that isn't how it is customarily done.

As I said, the situation is indicative of a flaw in NZX processes/procedures and is not consistent with how other share entitlements are treated.

[Beagle]

Poor housekeeping I agree.

[tango]

The real question though is will Kingfish shares continue to trade at a 10-11% premium to NTA all the way through to November 2022 ?

I'm not convinced so to me the real value of the warrants is considerably less than their theoretical value.

The premium is something I am not comfortable with. This has only happened since deposit interest rates dropped to below 1%
If interest rates come back up to 4%-5% I feel a lot of the premium will disappear.

Historically all of the Fisher Funds (KFL, BRM, MLN) shares traded at a DISCOUNT to NAV. With interest rates starting to creep up most other dividend stocks have dropped in price but KFL is still at a crazy premium to NAV. I can't see this being sustained if we get back to 4% in the bank. Of course, I could be wrong!

Date 18/12/2019
KFL NAV $1.6265
Share price close $1.59
Discount 2%

Date 11/12/2019
KFL NAV $1.6137
Share price close $1.57
Discount 3%

Date 6/11/2019
KFL NAV $1.5235
Share price close $1.50
Discount 2%

Date 31/10/2019
KFL NAV $1.5240
Share price close $1.49
Discount 2%


Another issue I have with KFL is their top 5 holdings makes up 66% of their portfolio as per 3/11/2021 weekly NTA update. Poor diversification or smart investing ?, you folks be the judge.

Warren Buffet would say smart investing. I like the fact that KFL have the strength of their convictions and an ability to pick winners

[alokdhir]

Premium to NAV for all Fisher funds is based more on interests rates too low and no other options to invest for regular income returns ...they are not too much dependent on what market perceives as better alternative so justifying 25% for MLN and BRM while not for KFL will be futile ...agree may not be same but will be there as usual . Market never gave KFL similar premiums like MLN and BRM but what it gave 10-12% will also stay as long as BRM and MLN premiums stay as all are related to 2% quarterly tax free returns .

IMHO keeping in view the marked underperformance of NZX to world markets ....KFL has better chance of doing well in 2022 then MLN and to some extent BRM

So my expectations of KFL warrant being worth 15 cents is justified as expecting KFL SP to be around 210-218 in next Nov and offer is around 188-89 ...thus leaving warrant price as 25-30 cents in Nov 2022

[Beagle]

That's my key concern too. The fact of the matter is the units have only traded at a premium to NAV when interest rates are at 100 year lows.
Already we are seeing Bank's offering 3% term deposit rates (e.g. Westpac 5 year term deposit) which is dramatically higher than what was on offer 6 months ago.

he inflation data out last month was an absolute shocker at 4.9% and it seems certain that interest rates are headed materially higher from here over the year ahead. The discounts you provided are very modest. At times they have traded in the teens, I recall up to 15% discount to NTA at one point and may have been higher going way back.

Buying KFL warrants on the assumption that the premium to NAV will remain where it is today feels like skating on very thin ice to me.

[tango]

That's my key concern too. The fact of the matter is the units have only traded at a premium to NAV when interest rates are at 100 year lows.
Already we are seeing Bank's offering 3% term deposit rates (e.g. Westpac 5 year term deposit) which is dramatically higher than what was on offer 6 months ago.

The inflation data out last month was an absolute shocker at 4.9% and it seems certain that interest rates are headed materially higher from here over the year ahead. The discounts you provided are very modest. At times they have traded in the teens, I recall up to 15% discount to NTA at one point and may have been higher going way back.

Buying KFL warrants on the assumption that the premium to NAV will remain where it is today feels like skating on very thin ice to me.

The discount to NAV calculation is confusing because KFL backs out the value of warrants so I picked dates where that wasn’t a factor. When warrants are on offer the discount is significantly greater - in the 10-15% range. Which is again why I am nervous about buying KFL at this time.

You only need to look at SPK which was bought as a dividend stock and has dropped heavily with only a modest increase in interest rates. SPK is looking like a buy right now if you are after dividend yields

[alokdhir]

Then that will go true for BRM as well MLN...they are the ones which trade at higher premiums . Also they dont have the luxury of having a sluggish year behind them like KLF does .

Also keeping in view the marked increase in worldwide debts of all including NZ ...I am pretty sure rates are not and cannot go much higher ...this cycle top will be 2.5% OCR max and that too in next 2-3 years .

Covid has devasted economies and people's finances ...

Regular income options will remain in demand and on premium for some time to come .

Let the time decide the final outcome .

PS : Added attraction of all these funds is PIE tax structure of max 28% ....most lucrative for HNI on 39% new bracket

[justakiwi]

This thread was started in December 2015, and here we are today, 6 years later, having exactly the same discussion. Which is interesting, to say the least.

[777]

Has anyone else noticed that KFL is not currently quoted by NZX as CE ( cum entitlement ) or CW ( cum Warrants, although there seems to be no letter W allocated for Warrants ) and presumably won't be quoted XE or XW after the record date but before allotment, either. The same situation apparently applies for all Warrant issues and strikes me as a flaw in NZX process/procedure which could be a trap for the unwary.

You got your wish. Showing cb for the last day.

[ronaldson]

Yes, after I posted I expressed my point of view via email to NZX, NZSA and key personnel at Kingfish including the Chair. Within 24 hours KFL had issued the Quotation Notice announcement for the warrants to NZX. I believe that action may have then triggered the attribution of CB ( not sure why one would use that - Cum Bonus - to describe the situation but may be the best of limited choice )to the listing, which acts as an alert. More important will be the use ( presumably ) of XB after the record date, although in this instance allotment follows promptly thereafter.

[Beagle]

Well done for making some noise about this.

[ronaldson]

KFLWG will be tradeable tomorrow ( may be from 11.00am? ). I wonder what price the ticker will open at? My guess 6c. Perhaps a preponderance of sellers initially given 79m on issue and the head shares are quite a bit ahead of NTA at the current $2.03?

[ronaldson]

First sale of the Warrants at 6.8c, and buyers are now at 7.1c. I guess on-market transactions will not really pick up until folk receive their holder statements after allotment yesterday and are more likely to enter the market on the sell side. Considering the warrant issue was on a 1 : 4 basis it is like a supplementary tax paid dividend of almost 2c per share if you sell right away - makes the effective yield on the head shares look pretty good!

[mike2020]

Ok, now large orders at 7.5c. If you said 14c after tax div between now and then means you are buying at 1.89+.075 makes todays purchase $1.965. KFL NTA is $1.84. In a rising interest rate environment would you be wise to buy, hold or sell? Is trading above NTA a long term thing or an anomaly?

[alokdhir]

Ok, now large orders at 7.5c. If you said 14c after tax div between now and then means you are buying at 1.89+.075 makes todays purchase $1.965. KFL NTA is $1.84. In a rising interest rate environment would you be wise to buy, hold or sell? Is trading above NTA a long term thing or an anomaly?

Rising from almost 0 ...NZ interest rates will be at very very low levels compared to past for some time to come ...If u agree then u can do the maths yourself

[alokdhir]

1.25 Mil warrants buyers @ 10 cents ...seems like as anticipated its range will be 10-15 cents ...people taking a call on next years markets especially NZX which underperformed in a big way all 2021 .

[fastbike]

KFLWG will be tradeable tomorrow ( may be from 11.00am? ). I wonder what price the ticker will open at? My guess 6c. Perhaps a preponderance of sellers initially given 79m on issue and the head shares are quite a bit ahead of NTA at the current $2.03?
The market did not agree with that guess.
Do you have some knowledge you could share with the forum ?

[alokdhir]

KFL coming closer to going ex warrants next wednesday as record date is 12th Nov .

Thats pulling the SP up ...

Maybe before going ex KFL will make new high of 215 ....Depends upon what market thinks is warrants worth...Surely worth 15 cents or more ?

Maybe this assessment ...market liked more ...day one closing 13.5 Cents ...maybe 15 Cents possible ...but almost here . Warrants are a great long term Call options on NZX ...so has both time value and offer value attached .

Have seen market is valuing them pretty highly right at start ...same trend continues ...

But as mentioned here ...soon supply can come ...after all 79 Mil issued FOC :cool:

[justakiwi]

I haven't had an allocation email from Computershare yet. Should I have?

[Beagle]

I can see how you got to 15 cents easily enough and concur that around there is their theoretical value based on where the shares are currently priced. No issues so far. The real question though is will Kingfish shares continue to trade at a 10-11% premium to NTA all the way through to November 2022 ?

I can understand a premium to NTA for the better diversified Barramundi and Marlin portfolio's especially when their performance above the benchmark in the medium term has been superior and investment in these effectively deals with all the FIF drama's of direct overseas investment but for a bunch of NZX shares that are easily replicated without foreign exchange or FIF drama's is such a premium justified and far more importantly is the premium expected to be enduring ?

I'm not convinced so to me the real value of the warrants is considerably less than their theoretical value.

Another issue I have with KFL is their top 5 holdings makes up 66% of their portfolio as per 3/11/2021 weekly NTA update. Poor diversification or smart investing ?, you folks be the judge.

I called it but the price still surprises me. The real issue is not the value of the call option per se but the assumption that KFL will continue to trade at a 10-11% premium to NTA when their portfolio is so easy to replicate.

In addition there's the little known fact that I really only quite recently got on too that you can buy ostensibly the same portfolio through their unit trust at no premium to NTA. This also seems to apply to Barramundi and Marlin, see Australian and International Growth fund and go and have a look at the quarterly reports and compare shareholding disclosure of unit trusts with listed vehicles, they look pretty much identical to me ! https://fisherfunds.co.nz/investment/managed-funds/new-zealand-growth-fund

From what I can see these unit trusts ostensibly replicate the shareholdings of the listed companies Kingfish, Barramundi and Marlin.
If you like the 2% PIE distributions each quarter its easy enough to withdraw 2% of your unit trust each quarter and mirror what the listed funds are doing.

Further, for those with $500K or more, you can set this thing up with their private wealth team and design whatever portfolio suits you and tailor a dividend withdrawal program monthly or quarterly, whatever you like e.g. 0.75% per month = 9% per annum.

So coming back to the premium to NTA question, why would you pay 10-25% premiums for the listed vehicles when the unlisted unit trusts holding the same investments trade at NTA ?

[SPC]

Yes Beagle you're right to point out the parallel unit trusts being available for purchase or sale at NTA. I prefer the listed alternatives as they allow an investor to buy or sell at times where be the market is not in tune with the NTA..discount or premium events. This can improve returns vs being locked to NTA.

[Beagle]

Yes Beagle you're right to point out the parallel unit trusts being available for purchase or sale at NTA. I prefer the listed alternatives as they allow an investor to buy or sell at times where be the market is not in tune with the NTA..discount or premium events. This can improve returns vs being locked to NTA.

Deleted...

[SPC]

Yep but I haven't seen the unit trust offering warrants...

[alokdhir]

To me, invest in the unit trusts when the listed vehicles are trading at a premium to NTA and invest in the listed funds when they're trading at a discount to NTA. Why has the market accorded the listed funds such a huge premium ? The answer of course is the dividend yield of 2% tax free each quarter...but that's dead easy to replicate with a 2% unit trust withdrawal each quarter.

Its not as easy if u look at it from Tax angle especially for buy and forget type people and for people on 39% rate ...Simplicity and finality of listed PIE tax dividends is unparalleled . Main reason many in it for the long hauls ...they dont care about the premiums or discounts as regular income perpetually is their only goal .

Same as u said about people choosing to sell their homes and move to retirement villages ...

[Beagle]

Yes that's a key attraction of the listed funds but there's no such thing as a free lunch and the warrant issue is of course dilutionary to shareholders NTA when the warrants are exercised.
Warrants can be a cheap call option when they're priced right, I will certainly concede that and have been a very lucrative hunting ground for this dog in the past when they have been mispriced but there days it seems there's a lot more players.

Yes alokdhir...up to a 15% premium to NTA the listed funds give ~ 7% net return to investors, (8 / 115), which is pretty much unbeatable on the NZX.

I can't get my head around these premiums though, especially for Marlin so I've been talking with the private wealth team about setting up my own program..

Used to be a minimum of $300K, now $500K with effect from 30/9/2021. The ability to custom tailor a monthly dividend while I am semi retired now, probably 0.5% per month and step it up when fully retired to probably 0.75% per month is very attractive.

Anyway here's the Barramundi fund sheet https://fisherfunds.co.nz/assets/fund-updates/FFMF/Fisher-Funds-Australian-Growth-Fund-30-September-2021-Fund-Update.pdf Not quite as much disclosure as the quarterly ones for Barramundi but the shareholdings for those disclosed look the same to me.

[SPC]

I think the dog forgets what day it is sometimes when he wakes up 😉

[Beagle]

LOL Lockdown does that to you

[SPC]

Just don't over think it too much...you know you like them 😉

[Beagle]

I like them but definitely don't like the premium to NTA. Can invest in the managed funds, (which are also a PIE), create one's own dividend program, and still get into the listed warrants as a call option on various index's whenever they're attractively priced...there's more than one way to skin a cat :D

[SPC]

Give me the listed markets any day.
Entry and exit at a price point of my choosing. This old Tom will sit patiently in the shade for some opportunity to come buy. None of this doe-eyed food bowl stuff.
I'll dine when I'm hungry..😋

[alokdhir]

Warrants have come to exactly expected level on day 2 ...15 Cents and rising ...

What is the right value to get rid of them ?

[ronaldson]

I did note that the first parcel sold on market yesterday was just over 82000 warrants at 6.8c - less than $6k to acquire the whole lot and worth over twice that on-market today!

[alokdhir]

I did note that the first parcel sold on market yesterday was just over 82000 warrants at 6.8c - less than $6k to acquire the whole lot and worth over twice that on-market today!

I had a opening buy order at limit 10 cents ...but my brokerage was too slow ...lost out ...I knew it will end up around 15 cents soon ...but they just didn't let me buy by increasing my price too slowly

[ronaldson]

Half Year Financials ( to 30 Sept ) out today for KFL together with the quarterly dividend announcement - 3.67cps with record date 3 Dec and payment date Friday 17 Dec. The dividend is calculated at 2% of NTA and is the highest ever paid historically.

Interestingly, NTA as at 30 Sept balance date is stated to have been $1.89 per share, before allowing for management's performance fee entitlement for the period of just over $2m. The last weekly update NTA released to the market is calculated on 17 November and is $1.8233 per share. The allotment of Warrants doesn't impact NTA per share ( thou the ultimate exercise of them in November 2022 certainly will ) but should ( and seems to have ) resulted in a small dip in the actual share price post issue given the warrants have some value and prior to the announcement holders had an expectation that a further issue of Warrants was reasonably imminent.

At the market close today of $2.00 for KFL the head shares are still trading at a significant premium to NTA notwithstanding the warrant issue, and the market seems to be still weakening. I wonder if the current premium will reduce once we are past the ex dividend date.

[777]

Actually the March div was the highest paid at 3.71cps

https://www.nzx.com/instruments/KFL/dividends

[Sideshow Bob]

DIVIDEND REINVESTMENT PLAN PRICE DETERMINED10/12/2021, 9:35 am CORPACT10 December 2021
DIVIDEND REINVESTMENT PLAN PRICE DETERMINED
Kingfish Limited (Kingfish) advises that the share price used to calculate entitlements under the Dividend Reinvestment Plan (the DRP) has been set at $1.8975.
This is the volume weighted average price of all Kingfish shares traded on the NZX Main Board during the five trading days from and including the ex-dividend date (being 2 December 2021), less a 3.0% discount.
The new shares will be issued on the dividend payment date (being 17 December 2021) to those shareholders who have elected to participate in the DRP.

Ends

[winner69]

Not a very good monthly report from Kingfish

Some big downs on a few stocks

Looks like the three Fisher funds underperformed in November …..losing theirs mojo


http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/KFL/384547/361488.pdf

[Beagle]

A very poorly diversified fund with the top holdings making up a whopping 69% of funds under management.

On the positive side at least they have continued to beat the NZX50 over the last year.

I think Sam Dickie and his team need some fresh idea's for 2022.

[winner69]

A very poorly diversified fund with the top holdings making up a whopping 69% of funds under management.

I think Sam Dickie and his team need some fresh idea's for 2022.

Esp even the market is seen as ‘topping’ ……Richler priced stocks not a good place to be

Sam gotcha good job ….doesn’t seem to onerous to me …and probably paid more than the living wage

[Beagle]

Esp even the market is seen as ‘topping’ ……Richler priced stocks not a good place to be

Sam gotcha good job ….doesn’t seem to onerous to me …and probably paid more than the living wage

Just "a little" more lol. I sometimes wonder what they do in a quiet month like November when they make no material portfolio changes and none of their companies reported. One supposes that they're all "working" from home.

Just sharing what I know. Fisher have lost their mandate as a default Kiwisaver service provider from 1 December 2021. I don't know how this will affect the billions they have under management in their Kiwisaver and unlisted funds, some of which is invested in the same stocks as the listed Kingfish - Barramundi - Marlin trio but this can't be a good thing.

I have delayed any consideration of investing in their international unlisted managed funds as a precautionary measure.

[winner69]

Just "a little" more lol. I sometimes wonder what they do in a quiet month like November when they make no material portfolio changes and none of their companies reported. One supposes that they're all "working" from home.

Just sharing what I know. Fisher have lost their mandate as a default Kiwisaver service provider from 1 December 2021. I don't know how this will affect the billions they have under management in their Kiwisaver and unlisted funds, some of which is invested in the same stocks as the listed Kingfish - Barramundi - Marlin trio but this can't be a good thing.

I have delayed any consideration of investing in their international unlisted managed funds as a precautionary measure.

A day in Sams life

Those bloody Pushpay shares we got. ....jeez down 28% last month ....should have sold when we thought the model ws broken .... but we hoped like hell they'd do OK into the future.

What we do now --- OK lets toss a coin .... heads we sell and tails we keep ..... to fill in the day lets do 50 tosses ..... bugger its come out 25 heads and 25 tails ..... so inconclusive .... so lets buy more as wouldn't want to miss out on the rebound

[Beagle]

Just sharing what I know. Fisher have lost their mandate as a default Kiwisaver service provider from 1 December 2021. I don't know how this will affect the billions they have under management in their Kiwisaver and unlisted funds, some of which is invested in the same stocks as the listed Kingfish - Barramundi - Marlin trio but this can't be a good thing.

Just unpacking this a little more. This is not an anti Fisher thing...just coming to grips with the implications for the market.
I understand that Smartshares has received the tick of approval as a default Kiwisaver provider.
I don't know what happens to the billions Fisher have under management that is there from default up until now ? (default is where people don't choose their own Kiwisaver provider). Does anyone know what happens to those funds ? Are they reallocated to the new Kiwisaver default providers like Smartshares or is it just new funds coming into Kiwisaver that are allocated going forward ?

Either way what we witnessed yesterday afternoon was interesting and was commented on in the after market commentary, (content to come). Sorry can't find that comment easily but essentially it was saying that funds flow from Smartshares appears to have lifted the market in the late afternoon.

Here's my latest working theory. The billions Fisher's have had coming into their funds will reduce materially with the loss of their mandate as a default Kiwisaver provider, (that much is obvious). Fisher's have been stock pickers and a disproportionate amount of their previous inflows have been allocated into the market in the stocks they choose. They are poorly diversified in N.Z. as I've noted in earlier posts. Will the loss of material ongoing buying support affect the share price of Fishers preferred stocks in N.Z ? I don't know.

What are the implications for the shares Fisher's funds own in Barramundi and Marlin ? I don't know but again, it can't be a positive thing.

Smartshares will be investing based on NZX50 index allocations (not stockpicking) so some shares in the NZX50 that have previously had little institutional support will get materially more support going forward. I think that much is crystal clear.

My hint for 2022. Don't underestimate the effect of this over the long run going forward as we are talking billions of dollars of Kiwisaver money invested over time. Stocks in the NZX50 like HGH, GNE, ARV, ARG and OCA, (these are just examples, clearly there are many others) that were not on Fisher's favored list will get a lot more institutional support going forward from here.

There are also clear implications for companies that get added to the NZX50 in the future in terms of the amount of institutional Kiwisaver support they will attract over the years ahead. I'm thinking of HLG and TRA and also wondering about WHS. (Might reinvest previous realised profits in WHS when the time is right).

Disc: I own all the stocks mentioned above, (except WHS).
Disclaimer: This is just a working theory of mine that's a work in progress. Who knows, my thinking might just be a big dog's breakfast...time will tell.

[Jay]

I'm sure it is something like if the old default provider had not made contact/confirmation that they want to stay, with the customer, they had to move them on to another randomly picked default provider, not sure if they also would move them to the new default fund of balanced or whatever it was though

[Beagle]

..............see below

[Beagle]

I'm sure it is something like if the old default provider had not made contact/confirmation that they want to stay, with the customer, they had to move them on to another randomly picked default provider, not sure if they also would move them to the new default fund of balanced or whatever it was though

If that's the case then the reallocation of capital could have a quick and quite dramatic impact on share prices like we saw in the final 15 minute closing price match process yesterday afternoon and the implications for shares the Fisher fund invest in could be material as they'd be forced to liquidate a portion of their shares.

Interesting times. I am staying well clear of any of Fisher funds investments in the near term because the simple truth is its harder to make headway when the Kiwisaver tide has turned.

Found this. 5 Kiwisaver funds have lost their default status so that's a lot of new money heading to Simplicity and Smartshares and it would seem people are transferred over to a balanced fund with new providers automatically. Gosh the funds flow involved here could be HUGE !!
https://www.depositrates.co.nz/news/976518611/five-kiwisaver-providers-lose-default-status-two-new-ones-added.html

[Jay]

So old defaulter A has to sell up all their shares - remit the funds to New defaulter and then they buy the "same" shares again or whatever they need to fill the Kiwisaver Fund.
You would think there would be a better way in this technological age - plus if for example FPH as $35 when sold then $38 when bought- Mr/Mrs/Ms etc Kiwisaver customer has possibly lost out.
Yes the Kiwisaver funds are in individuals names but the underlying Shares etc are not.

[777]

Yes the Kiwisaver funds are in individuals names but the underlying Shares etc are not.

And that is the guts of it.

[Beagle]

So old defaulter A has to sell up all their shares - remit the funds to New defaulter and then they buy the "same" shares again or whatever they need to fill the Kiwisaver Fund.
You would think there would be a better way in this technological age - plus if for example FPH as $35 when sold then $38 when bought- Mr/Mrs/Ms etc Kiwisaver customer has possibly lost out.
Yes the Kiwisaver funds are in individuals names but the underlying Shares etc are not.

Here's what Fisher Funds had to say about it back in May when the announcement was made https://fisherfunds.co.nz/newsroom/kiwisaver/default-kiwisaver-provider-changes-and-what-it-means-for-you#:~:text=On%20Friday%2014%20May%2C%20the%20Gove rnment%20announced%20changes,default%20KiwiSaver%2 0provider%20as%20of%201%20December%202021.

Except:- I am a Fisher Funds default client - if I do nothing, what will happen?

You will stay being a Fisher Funds client until the government changes are implemented at the end of November. If you do not choose a fund with Fisher Funds or choose to move to another provider before 30 November 2021, you will be transferred automatically to another provider on 1 December 2021, and you will also be moved into a higher-risk balanced KiwiSaver fund. Emphasis added.

It will be the same for all five of the service providers that lost their default status.

Conclusion - Heaps more Kiwisaver money being invested based solely on NZX50 weighting is coming for certain.

Implications ? See post #558 earlier today.

[winner69]

Think one of the main reasons behind forcing changes was that there were far too many people in the very conservative funds (ie not earning much at all) while the managers were creaming it ---- so govt forced the changes to ensure people had more chance of decent returns and managers had to work harder to earn their keep.

[Beagle]

Think one of the main reasons behind forcing changes was that there were far too many people in the very conservative funds (ie not earning much at all) while the managers were creaming it ---- so govt forced the changes to ensure people had more chance of decent returns and managers had to work harder to earn their keep.

Agreed. Should be good for the shares I mentioned earlier today, among others.

[winner69]

I see Kingfish keeping the faith with A2 ... a true believer

They've added EBO ... that's good

Pretty bad under performance in Dec quarter by fund though - -3.3% v NZX50G -1.8%

Time for Sam to take an extended break methinks

[Rawz]

I cant remember if I have moaned about this before.. but i dont get why KFL invest in Infratil. Poor investors have to pay management fees to KFL only for them to pay another manager fees to invest 15% of their portfolio!!

[Beagle]

I see Kingfish keeping the faith with A2 ... a true believer

They've added EBO ... that's good

Pretty bad under performance in Dec quarter by fund though - -3.3% v NZX50G -1.8%

Time for Sam to take an extended break methinks

All of their funds are underperforming, see quarterly reports below released today. I'm inclined towards thinking their strategy of investing in growth stocks regardless of the PE may not be the optimal one for the current environment and could potentially lead to a significant period of underperformance. If that happens they may come in for a rerating down so these trade at a discount to the NTA, (like they have most of the time), which could lead to a double whammy of underperformance for KFL, BRM and MLN shareholders. I'm pleased I'm out.

GARP stocks are where its at in my opinion and the Fisher group have very few growth at a reasonable price stocks in their portfolio.

Fishers losing their default Kiwisaver status could potentially see significant fund outflows which might exacerbate any underperformance with the resulting selling pressure.

I can't help feeling Kingfish made a real mess of their ATM investment and have shown an inability to act quickly when the situation changes. I've been very unimpressed lately.

KFL underperformed in the last quarter http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/KFL/386272/363428.pdf
BRM also underperformed last quarter http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/BRM/386273/363429.pdf
And to complete the losing threesome Marlin also underperformed http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/MLN/386274/363430.pdf

[alokdhir]

Most over priced stock on NZX is KFL at the moment ...with estimated current NAV of just $ 1.63 and SP of $ 1.83 ...more then 11% premium in a rising rates environment is unjustified . Come Nov warrant exercise time ...it will be trading 5 cents below NAV ...so either NAV goes to 1.95 or more ...for that NZX 50 need rise 15% ...or warrants will not be subscribed this time ...1.89 was very ambitious from 1.51 of last issue . Only big NZX 50 rise can get them into the money

[SPC]

You two make me laugh to myself. If as you say the ratio of current market share price (determined by Jo blow public who bid each other up and down in an open market and nothing to do with the fund manager) to NTA makes you consider the stock is over valued then I'd say KFL is the least of your worries. It's not a useful metric to use to state your case...take a look at the stocks you do like and tell me which ones you can buy whose trading price is that close to their NTA value as KFL ..perhaps you could list them. Yield would have been a better metric if interest rates are the concern.
Just pointing out the contrast between today's opinions and the effusive praise of FFs listed funds not so long ago...go back and read some of them 😉

[mfd]

The difference is that KFL just owns other stocks on your behalf. They even tell you what they own. When they trade at an 11% premium it means you could sell your KFL, buy the constituents and end up with a position 11% larger than what KFL hold on your behalf.

Buying now means accepting 11% fewer shares than you could get otherwise, paying for the hope that management's future trades will be better than yours. Or perhaps for the convenience of them selling a portion for you every quarter to fund a dividend payment.

[SPC]

Yep and that's all been well canvased in earlier threads including but not forgetting the advantage offered via the PIE structure concerning dividends. I'm not defending the decisions buyers have made in recent times to bid the price differential, they did it to themselves. Take a look at Rakon as an example. Only buyers can explain why they buy. Sellers too.

[mfd]

Yes maybe the PIE status is useful for those needing the regular income and happy to sell their shares to achieve it.
Simply pointing out the difference - with Rakon it's not convenient to go out and buy a semiconductor factory directly, but it's extremely straightforward to buy a piece of all the assets KFL own directly. The discount or premium to NTA is much more relevant for managed funds than regular shares because buying directly is a real alternative.

[SPC]

No argument with any of that. I myself have pointed out in the past that extracting maximum value from listed PIEs is not a set and forget exercise and if something is too good to believe on either side of the equation then taking action is useful. They should be traded when common sense suggests. Previous comments re KFL falling share price - linked to falling NTA being a function of fund manager under performance is spurious given the fact that the market has been in a slump recently.
I do absolutely believe/agree that at times FF hold on to under performing stocks far too long, A2 being the most recent example and a while back I did post my view that FF stay 'hopelessly in love' with some 'high conviction' stocks long after the divorce papers should have been filed.
To me KFL is not a fund. It's a stock.

[Beagle]

It is a listed PIE fund and because KFL in particular is very modestly diversified its absolute child's play to replicate their holdings.

Fisher funds have enjoyed a mandate as a default Kiwisaver fund for many many years and the loss of this mandate should not be underestimated.
Tens and tens of millions of fresh money has been piling into fisher funds on a regular basis and the same stocks that make up KFL, BRM and MLN are the ones in their unlisted funds and kiwisaver funds.

The clear risk here is that without the same quantity of fresh funds coming to the market FF preferred stocks will get materially less support. I think underestimating the potential materiality of this change which came about in 1 December 2021 is a big mistake.

The increase above NTA primarily came about (in my opinion) for two reasons.
1. By far the biggest - ultra low interest rates forcing investors to chase yield and 8% PIE tax free yield is compelling when term deposits were paying less than 1%.
As interest rates increase the drivers behind investor behavior chasing yields regardless of risk and whether they're paid out of capital this will likely reduce.
2. Year of market outperformance. I think, (I could be wrong), we have a paradigm shift in investment drivers now and value and growth at a reasonable price (GARP stocks) are the only stocks that will provide market outperformance. These sort of stocks are either totally absent or woefully underrepresented in FF portfolio's.

I know I have praised FF's before, perhaps too effusively but things have changed and to succeed in this new environment of higher interest rates and higher inflation requires one to very very adaptive and agile...something FF have proven is not one of their strengths. I don't believe any of their funds should be trading at a premium to NTA.

[SPC]

I think we are both in agreement on all of that ✔️

[mike2020]

And if it returns to it's historical discount to NTA what will the warrants be worth? Were good selling over 10c I suspect.

[Sideshow Bob]

And if it returns to it's historical discount to NTA what will the warrants be worth? Were good selling over 10c I suspect.

Especially when they've been trading today at 6.7c!! :scared:

[alokdhir]

Tomorrow's NAV will show if NAV fell more or SP fell more .... todays price action of market will decide NAV of tomorrow ...Still holding on to big premium to NAV ...so has retail interest still .

Mr B is right though ...why pay more if u r not doing better then index ...but it can change if few of its stocks run up fast ...MFT / FPH / IFT / SUM / AIA ...all have equal chance of doing well ahead

[Beagle]

Chief investment officer Ashley Gardyne opines on the outlook for 2022. https://www.nzherald.co.nz/business/continuous-disclosure-how-to-combat-turbulent-sharemarkets-and-what-lies-ahead/QPKJF3IFBYMR4OYRNBHIRN7XVA/

[alokdhir]

Chief investment officer Ashley Gardyne opines on the outlook for 2022. https://www.nzherald.co.nz/business/continuous-disclosure-how-to-combat-turbulent-sharemarkets-and-what-lies-ahead/QPKJF3IFBYMR4OYRNBHIRN7XVA/

Dont agree with his general saying that Sell the outperformers of down market and Buy the bigger down stocks ...ie switch from winners to losers ...lol . That way its like selling SUM and buying OCA ...not a good advise .

But I do get his overall point that now its becoming stock specific market so people should employ professional services of fund managers ...that theme is always advertised or reiterated by them at every opportunity ...:p

[850man]

Quite the dip in an otherwise constantly increasing stock. Time to top up or still volatile??

[winner69]

Quite the dip in an otherwise constantly increasing stock. Time to top up or still volatile??

Going down from falling NTA and the shareprice premium reducing

That premium still 7% (was about 15%) and possibly will disappear all together soon as the market loses its exuberance

I wouldn't be buying today - esp if you think its cheap because price was higher a month or so ago

[Beagle]

KFL's NTA went down by just on 10% in January, same as the market. Not worth any premium when its complete child's play to replicate their relatively poorly diversified portfolio yourself and not incur their annual fees which some years are over 3% per annum.

[SPC]

Beagle's found that old slipper outside his kennel this morning. I expect he settle under a tree and munch away all day, or maybe the rest of the summer...

[Rawz]

KFL once traded 20% discount to NTA? Or was that MLN? I remember one of them did for awhile. Just goes to show how far it could fall.

[Muse]

If you want to see a set of financial statements that will blow your socks off - head to the companies office, search for fisher funds, and download their financial statements. Possibly the highest npat % margin you will ever find - all paid out as dividends.

Will be interesting to see what FF’s loss of default status does to their P&L over the next few years.

[alokdhir]

Guru W69 and super Guru Mr B are super negative on FPH and MFT then how will KFL perform as thats 36% of KFL ....moreover its trading at almost 10% premium to NAV ...what future investors will have in KFL if our Gurus are right ...I wonder

But still many hopeful people are buying warrants at 6 cents in hope of making money by Nov ie they hope KFL SP will be over 195 or more by then ...not possible if our Gurus are right that these high P/E stocks have no future in rising rates environment also premium to nav also has no future in rising rates environment .

Lets see what time tells us ...Me is not negative on KFL stocks but surely was and am negative on premium to nav ...always said its like buying a $ 100 note for $ 110 ...:p

[Beagle]

If you want to see a set of financial statements that will blow your socks off - head to the companies office, search for fisher funds, and download their financial statements. Possibly the highest npat % margin you will ever find - all paid out as dividends.

Will be interesting to see what FF’s loss of default status does to their P&L over the next few years.

Chief investment officer Ashley Gardyne had another opinion piece in the Herald yesterday about embracing volatility and thinking long term. Read too much like a marketing piece for FF so I didn't post a link. Marlin which is the fund he's primarily in charge of has made some VERY bad calls lately. I suspect later this year once the underperformance to the market starts to make itself crystal clear the premium to NTA will be very vulnerable.

Not sure I am comfortable with 'super guru" status...more comfortable identifying with the Beagle breed that they're usually pretty cunning at finding a feed or sniffing out trouble...but no dog's nose is infallible.

[Onion]

If you want to see a set of financial statements that will blow your socks off - head to the companies office, search for fisher funds, and download their financial statements. Possibly the highest npat % margin you will ever find - all paid out as dividends.

Will be interesting to see what FF’s loss of default status does to their P&L over the next few years.

That is interesting FM.

A fully imputed dividend of about $3400 (yes dollars, not cents) per share. Admittedly they don’t appear to have many shares on issue.

[Sideshow Bob]

That is interesting FM.

A fully imputed dividend of about $3400 (yes dollars, not cents) per share. Admittedly they don’t appear to have many shares on issue.

Not many shares, but equates to over $50m.....

[alokdhir]

Looks like market not listening to our Gurus ...KFL big mover today ...must be premium widening as its stocks are not up that much ...will know on Thursday

[alokdhir]

Latest NAV just out today ...it improved only 0.5 Cent and SP up 11 Cents ...premium back to 12 % ...looks like no rates fear for KFL premium payers ...

[850man]

Latest NAV just out today ...it improved only 0.5 Cent and SP up 11 Cents ...premium back to 12 % ...looks like no rates fear for KFL premium payers ...

with a dearth of positive news in the NZ market, seems people are clinging to anything

[alokdhir]

with a dearth of positive news in the NZ market, seems people are clinging to anything

This kind of over indulgence will leave a very nasty hangover ....I foresee premium turning to small discount by Nov ...underline market risks are aside

[alokdhir]

Latest KFL nav of 1.6170 and SP is 1.86 ....15 % premium ....wow !!!

[alokdhir]

Stocks to watch is KFL / BRM / MLN ...will retail still be paying 10-15% premiums or it will become discount soon ....I am betting on premiums going away in next few days or weeks .

[Sideshow Bob]

Still an 11.8% premium......

Kingfish Monthly Update - March 2022 (nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com) (http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/KFL/388539/366321.pdf)

[SPC]

In the current environment I'd suggest these last month types of reports are fairly irrelevant. It's day by day now.
MLNs upcoming warrant exercise is looking to be fairly interesting..

[winner69]

Latest newlwttwe funny as

Pretty desperate stuff when you say you are down 10% for the quarter and you have to resort to the old 'the market is a voting machine' trick and it will all OK when the 'weighing machine' kicks on.

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/KFL/390982/369272.pdf

[Beagle]

I agree. They should simply be honest about it and say that the massive rise in the 10 year risk free Govt bond rate means our strategy of investing in high growth stocks regardless of valuation hasn't worked well in recent times not because people have "voted" that these companies are worth less, its simply the mechanics of standard time honored valuation methodology. I suppose we'll soon see some more articles in the press from Ashley Gardyne telling people to hang in there.

[mike2020]

It's the warrants the bewilder me. Work out what they are costing today and ask yourself which way the tides going. Ah for the good old days of a discount to NTA.

[alokdhir]

Market is keeping SP at 8% yield of last dividend ie 3.55 cents translates to 1.775 ....

On that basis next dividend is estimated around 3.15 cents ...which should correct SP to 1.60 levels ...if thats the logic market is pricing KFL on

[mfd]

Market is keeping SP at 8% yield of last dividend ie 3.55 cents translates to 1.775 ....

On that basis next dividend is estimated around 3.15 cents ...which should correct SP to 1.60 levels ...if thats the logic market is pricing KFL on

I think you're getting a little convoluted here. KFL are mandated to pay out 2% of their NAV as a dividend each quarter, paid by a combination of accrued dividends and selling holdings. They pay an 8% of NAV yield by design. I would suggest they are broadly priced to the NAV (minus a discount due to high management fees, plus any premium you assign to their ability to outperform the market).

The apparent pricing for an 8% yield is just an artifact of their dividend policy.

[alokdhir]

I think you're getting a little convoluted here. KFL are mandated to pay out 2% of their NAV as a dividend each quarter, paid by a combination of accrued dividends and selling holdings. They pay an 8% of NAV yield by design. I would suggest they are broadly priced to the NAV (minus a discount due to high management fees, plus any premium you assign to their ability to outperform the market).

The apparent pricing for an 8% yield is just an artifact of their dividend policy.

Was trying to figure out Market logic of pricing KFL SP way over NAV ...as its not NAV based anymore then has to be effective yield basis ...thus when actual dividends will go down which are NAV related then SP will follow ...

Not that " Convoluted " ....

[Beagle]

I think you're getting a little convoluted here. KFL are mandated to pay out 2% of their NAV as a dividend each quarter, paid by a combination of accrued dividends and selling holdings. They pay an 8% of NAV yield by design. I would suggest they are broadly priced to the NAV (minus a discount due to high management fees, plus any premium you assign to their ability to outperform the market).

The apparent pricing for an 8% yield is just an artifact of their dividend policy.

The problem is they're underperforming the market and its Childs play to replicate their portfolio yourself and not have to wear all their management and "performance" fees or pay a stupid premium to NTA.

[SPC]

Beagle the 'stupid premium to NTA' has no connection to the fund manager. Maybe should be targeting 'stupid buyers'. And see how far that line gets you.
My aggregate buy price across all 3 funds is considerably lower than current NTAs so I've got alot of fat to burn before I even get there and my personal yield from all 3 is in double figures. Investment is a long term game and my success was set years ago rather than on recent metrics.
Now don't you have some other old shoes there to chew on?

[Beagle]

Beagle the 'stupid premium to NTA' has no connection to the fund manager. Maybe should be targeting 'stupid buyers'. And see how far that line gets you.
My aggregate buy price across all 3 funds is considerably lower than current NTAs so I've got alot of fat to burn before I even get there and my personal yield from all 3 is in double figures. Investment is a long term game and my success was set years ago rather than on recent metrics.
Now don't you have some other old shoes there to chew on?

LOL - Each to their own. Good for you that you are happy and getting a fabulous yield on what you paid. Yes, I think anyone buying and paying a 20% premium to NTA for any of these three funds could do a lot better in a different way, but that doesn't make them stupid, probably just uninformed and maybe just a bit lazy. Anyway...a lot has been said already about the unwarranted premium to NTA.
Maybe some people really like the warrant issues.

[SPC]

Well you've been doing most of the saying here so I think you know what the answer is😉

[mfd]

LOL - Each to their own. Good for you that you are happy and getting a fabulous yield on what you paid. Yes, I think anyone buying and paying a 20% premium to NTA for any of these three funds could do a lot better in a different way, but that doesn't make them stupid, probably just uninformed and maybe just a bit lazy. Anyway...a lot has been said already about the unwarranted premium to NTA.
Maybe some people really like the warrant issues.

Perhaps I should have added the premium for entertainment value of participating in the merry-go-round of artificially high dividends, dividend reinvestment plans, and warrant issues. Keeps life interesting, but there is a cost to all that friction.

[Beagle]

Yes....I've dined out extremely well indeed on Barramundi warrant issues over the years, fabulously entertaining stuff. Some very fond memories there.

P.S. and speaking of this...https://announcements.nzx.com/detail/391099

Exercise price of 89 cents (less dividends paid during warrant tenure), looks very ambitious to me but there could be something to "WAG" about at some point with these WG suffix warrants.

[ronaldson]

Interesting to note the fall in KFL NAV as follows :-

06/01/22 - $1.80
10/02/22 - $1.68
28/04/22 - $1.50

The bottom has now fallen out of KFLWG on the Buy side, with plenty of (unrealistic ) sellers remaining. While the head shares are still trading at over $1.70 given the underlying NTA and the geo-political and economic issues weighing on the market I would say the Warrants have done their dash for this cycle. The winners will be those who exited the Warrants early, and it has been and will remain all downhill from there.

[alokdhir]

Interesting to note the fall in KFL NAV as follows :-

06/01/22 - $1.80
10/02/22 - $1.68
28/04/22 - $1.50

The bottom has now fallen out of KFLWG on the Buy side, with plenty of (unrealistic ) sellers remaining. While the head shares are still trading at over $1.70 given the underlying NTA and the geo-political and economic issues weighing on the market I would say the Warrants have done their dash for this cycle. The winners will be those who exited the Warrants early, and it has been and will remain all downhill from there.

Those NAVs will lead to ever lowering quarterly dividends ...which seems to be keeping SP buoyant ...As dividends go down so will SP ...

June quarter dividend will be close to 3.10 cents ...if NAV remains at current levels

[ronaldson]

It seems each quarter dividend is declared based upon 2% of NAV per share as at the end of the prior quarter period, so the June dividend is $0.0316cps based upon a NAV of $1.58 as at 31 March 2022.

The weekly NAV last reported as at 19 May 2022 has reduced to $1.4391 so it looks like future quarter dividends can be even lower and the aggregate 14.34cps paid as dividends for y/e 31 March 2022 will not be reached again for some time unless Mr Market ( at least the KFL component basket of it ) picks up substantially going forward. When you are paying a dividend on this basis in a falling market the dividend itself compounds the lowering of the NAV.

The low return delivered by the portfolio activated the management fee rebate, reducing the fee from 1.25% to 0.95%. The management fee is payable despite the Company recording an after tax operating loss of $17.3m for y/e 31 March 2022.

There seems no reason currently for KFL shares to trade at a significant premium to NAV as is the case at present. As alkodhir points out above dividends going downhill will not logically continue to support SP.

[Sideshow Bob]

Kingfish Monthly Update - June 2022 (nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com) (http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/KFL/393672/372725.pdf)

Premium of 19.1% to NTA....!! :scared:

[mike2020]

Kingfish Monthly Update - June 2022 (nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com) (http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/KFL/393672/372725.pdf)

Premium of 19.1% to NTA....!! :scared:

With a 10% premium discount to it's peers surely a buying op? :t_up:

Wait, is that 30%? ;)

[alokdhir]

If KFL comes anywhere near its NAV then it can be great entry into a good growth portfolio which can do very well after this carnage is over

I think its present NAV is close to $ 1.30 ...its SP is moving towards it fast ...maybe in next big leg down it will catch up with NAV

[Rawz]

If KFL comes anywhere near its NAV then it can be great entry into a good growth portfolio which can do very well after this carnage is over

I think its present NAV is close to $ 1.30 ...its SP is moving towards it fast ...maybe in next big leg down it will catch up with NAV

Could see it trade at a discount like the good old days.
The higher rates go and the longer this downturn lasts the more selling pressure will come from the retirees moving to term deposits

But agree. Would like to add some KFL at a discount. Set up the dividend reinvestment and check back in 10 years.

[mfd]

If KFL comes anywhere near its NAV then it can be great entry into a good growth portfolio which can do very well after this carnage is over

I think its present NAV is close to $ 1.30 ...its SP is moving towards it fast ...maybe in next big leg down it will catch up with NAV

Why not just buy the contents of their portfolio now at NAV, and avoid the ongoing fees?

[SPC]

I've been holding kfl since 2004. Taking into account my agregate holding price minus div's received and profit from a few sales I'm sitting on a free portfolio of shares, not only that but they've returned considerably more than the holding cost.
Ive been paid to own them!. The shares still have a liquidation value at today's price and spit out quarterly divs. It's working well for me. Each to his/her own...

[alokdhir]

Why not just buy the contents of their portfolio now at NAV, and avoid the ongoing fees?

U can but KFL gives u the option to take PIE income dividends which help if u have a large dividend portfolio already or other income like salary ,rental etc .

PIE income can be fully excluded from IR3 thus it gets taxed maximum at 28% only not 39 % ....saves a lot

[SPC]

Yep. You either get it or you don't.
Very happy long term holder.

[SPC]

I've also done the calcs on my BRM and MLN holdings.
BRM is not yet at free hold value but approaching (i.e total hold cost less sales profits and divs). It could still be liquidated today at at a profit.
MLN is a free hold (i.e total hold cost less sales profits and divs) and is ahead of hold cost and can be liquidated today at a profit.
They key for me to these outcomes has been buying up in market slumps and taking all divs as cash. Set and forget is not the way, dynamic management is necessary as for any long term holding.
I don't bark on about manager fees etc.
I retired from full time work at 53.
Just simply outlining what is possible with a long term view.
And an economical lifestyle helps..

[mfd]

U can but KFL gives u the option to take PIE income dividends which help if u have a large dividend portfolio already or other income like salary ,rental etc .

PIE income can be fully excluded from IR3 thus it gets taxed maximum at 28% only not 39 % ....saves a lot

Much of the dividend is just the proceed of sales or shares which doesn't necessarily attract tax for an individual. Could be more interesting if you're a 39% rate payer but otherwise I'd be very surprised if the benefits outweigh the management fees.

Certainly a convenient income generator if you want a hands off approach, but you do pay for the convenience as you would expect.

[winner69]

Annual Report says that Kingfish didn't get a Performance Fee for the March 22 year .... zilch..... prior year they got $6.3m

Paid $5.3m to Fisher Funds as Management Fees

Kingfish employees are employed by Fisher so no need t disclose how much the guru investment guys got paid ... that would be interesting

[SPC]

So just to clarify. Kingfish Ltd has a board of directors plus a couple of admin type people. They contract Fisherfunds Management Ltd on a 5 year term to determine how the company invests.
Kingfish Ltd has no business asking what the employees of a third party get paid, in the same way I don't ask what my dentist or Doctor gets paid. I'm not interested and I don't care.

[ronaldson]

You can pierce the veil to a limited extent by looking up the Financial Statements filed by Fisher Funds Management Limited on the Company Office register. The most recent is for y/e 31 March 2021. Fee income totaled $125m, with Operating Expenses $48m. After other minor expenses Profit Before Tax was $69m and Distribution to Owners $51m ( entities associated with TSB own about 2/3rds with the other 1/3rd owned offshore ).

Of course these figures relate to all FF entities, not just MLN, BRM and KFL.

[Sideshow Bob]

Quarterly Newsletter

Kingfish Quarter Update Newsletter June 2022 (nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com) (http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/KFL/395815/375202.pdf)

[ronaldson]

Any value in the warrants KFLWG well and truly busted now! And last reported NAV per share now under $1.42 and still falling!

[justakiwi]

That has been obvious for many months. It is the nature of warrants. This is the first time in many years KFL warrants have not been worth exercising.


Any value in the warrants KFLWG well and truly busted now!

[Sideshow Bob]

https://www.nzx.com/announcements/398829

Share price is $1.58, then issue shares at $1.5238 and NTA is only $1.439

Everyone's a winner, including Kingfish!

[winner69]

Hope Sam wasn't shunted sideways .... probably wasn't fired anyway

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/KFL/399370/379705.pdf

[alokdhir]

Hope Sam wasn't shunted sideways .... probably wasn't fired anyway

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/KFL/399370/379705.pdf

I think its downwards mate as MLN is a much smaller fund so less scope of higher fund fees ....thus bonuses

[alokdhir]

It seems market is trying to close the premium gap to NAV in this downturn ...sellers are persistent while buyers very hesitant .

Last NAV of 1.366 shud be close to 1.39 after two good days while SP hardly budged ...rather looking to touch June low of 1.43 ....only 4 cents ahead of NAV is the closest I have seen it recently ...maybe signs of retail slow capitulation or disdain with stocks

[mike2020]

Traditionally discounted to NAV. If it gets to 10% under that will probably signal a change in market sentiment. The capital loss for anyone who bought into the lunacy around when the last warrants were issued must surely linger for a decade. The issuing of those warrants made me question the real skill verses dumb luck they now operate with. I'd have expected better from a disciple of the hound.

[tim23]

Traditionally discounted to NAV. If it gets to 10% under that will probably signal a change in market sentiment. The capital loss for anyone who bought into the lunacy around when the last warrants were issued must surely linger for a decade. The issuing of those warrants made me question the real skill verses dumb luck they now operate with. I'd have expected better from a disciple of the hound.

Quite right and traditionally so did MLN and BRM sell at discount usually up to 10%. I used to argue that MLN should have been discounted less as their holdings could be easily sold without affecting the market, different for KFL with NZ equities.

[Rawz]

I still cant get over the fact that this managed funds largest investment is another managed fund

[alokdhir]

I still cant get over the fact that this managed funds largest investment is another managed fund

Let me give u another example of this kind of stuff ...

ANZ Private Bank's portfolio management schemes have ANZ Global Equity scheme as almost 50% weightage ...they charge regular monitoring fees on whole corpus also have fund charges on their ANZ Global Equity Fund which comprises of Vanguard's Index funds of different countries while Vanguard also charging their fund charges on their index funds

Thus a private bank's client ends up paying 3 different management fees on same corpus ...1 Monitoring fees to ANZ Private Bank of total amount 2. ANZ Global Equity Fund charges which is almost 50% of the corpus 3 Vanguard's Index fund charges which are the constituents of the ANZ Global Equity funds

Now its easy to understand how banks make so much profits as they can charge management fees under 3 different heads on same portfolio ...amazing

[SPC]

I wouldn't assume that customers of Bank Private Wealth investments are necessarily smart or informed investors. They're probably more enamored with being treated as 'special'.
I Interrogated one such outfit years ago and walked away totally unconvinced. Buying the banks own shares was far simpler and more lucrative as it turned out. I was far happier being one of the great unwashed with the public downstairs. Somebodys paying for the plush chairs upstairs.

[ronaldson]

Warrant exercise price established at $1.90 and formal notifications are close to being dispatched. On market share price has been around $mid 1.40s. Despite this, inevitably some warrants will be exercised, and payment made at the higher price, which tells its own tale!

[mike2020]

Warrant exercise price established at $1.90 and formal notifications are close to being dispatched. On market share price has been around $mid 1.40s. Despite this, inevitably some warrants will be exercised, and payment made at the higher price, which tells its own tale!

I would bet 0 get exercised. What tale are you telling? They were gifted, of course you would let them lapse, and even if you bought them you must have known it was a big gamble. I have done well out of KFLWA in the past and I knew from the get-go the only money in these was selling them asap.

[justakiwi]

100% agree. This is the first time since I first purchased, that warrants haven’t been worth exercising. It was obvious months ago that would be the case. There is no logical reason why anyone would choose to exercise this time round.


I would bet 0 get exercised. What tale are you telling? They were gifted, of course you would let them lapse, and even if you bought them you must have known it was a big gamble. I have done well out of KFLWA in the past and I knew from the get-go the only money in these was selling them asap.

[alokdhir]

What u guys are missing about ronaldson's post is that some warrants will still get exercised even when it seems totally illogical to do so ...He is trying to comment about the nature of some of the investors not on the logic of doing it . He has a point there that some of the investors are so passive and ill-informed that they just blindly follow the documents sent to them from KFL ...hopefully it will not happen but if 1-2 % get exercised then.....

[Rawz]

Yes that’s right. Some people don’t follow the SP that much and just buy because they are buying more shares.. even if it makes no sense to do it. But hey, it’s worked every other time and now they’ve got a good holding and good divvy income so just keep going I guess

[mike2020]

I wasn't missing anything. If you say a few isolated fools who probably have handed over power of attorney might exercise then what tale is it exactly you are sharing? You need to be demented to use them? Point taken.

[alokdhir]

With premium closing very fast ...KFL now just few cents away from last NAV ...Think time is here to start buying ?

No denying it has a good portfolio of long term growth stocks ....at NAV its a great investment in NZ market

[mike2020]

I feel about KFL the same way you feel about HGH. It's far to early. You will loose capital and be underwater for longer though.
Min 5% discount to NAV.

[tim23]

I feel about KFL the same way you feel about HGH. It's far to early. You will loose capital and be underwater for longer though.
Min 5% discount to NAV.
Yes they need to return to the pre COVID days when all the Fisher stable traded at about 10% discount to NTA - but these days under NTA is probably okay.

[alokdhir]

I feel about KFL the same way you feel about HGH. It's far to early. You will loose capital and be underwater for longer though.
Min 5% discount to NAV.


As per Mark Lister average return in a reversal month is 17.4% ....so even if there is 10% downside in next 2-6 months ....it can be made up in just one month if reversal happens in next 6 months time ( very likely ) ....also rather be in a diversified fund of great stocks then just one HGH type which can have its own personal problems in addition to just poor market conditions ...thats why I chose to START investing in KFL then HGH ...also note its a start only ...small lots every cent down till either allocation over or it stops falling ( these days its falling 2-3 cents everyday :scared: ) As I am not smart enough to pick a bottom so I choose this method as it helps me get inside over a range and days ....then bear some pain if LITTLE early like people did by going for HGH 1.80 ...similarly I will if KFL keeps falling after my allocation finished ....hopefully it will not go below 1.20 !!!!

[winner69]

Hey alokdhir - diversified fund of great stocks

Very subjective of you with that description of KFL portfolio

[Rawz]

But alokdhir isn’t the NTA premium only here because rates have been so low? Like this stock is a retiree dividend stock and has a correlation to deposit rates.

If you are buying at a premium you must think rates won’t be increasing from here?

The other issue is paying a premium in a bear market

I’m with Mike and Tim, best wait and see. Probably see a discount like the old days soon enough

[winner69]

These were the good old days

discount to NTA

Jan-19 -6.0%
Feb-19 -10.0%
Mar-19 -14.0%
Apr-19 -9.0%
May-19 -8.0%
Jun-19 -11.0%
Jul-19 -10.0%

Guru Investment Managers, not the broker analysts but real investment managers, use a thing called the Z score to assess whether listed funds are under or overvalued

Haven't looked at it for a while but might update it while the races are on this arvo.... keep me occupied between races :)

[alokdhir]

Mine was not a recommendation ....I am just getting back into my older position ....Also having MFT / IFT / FPH / SUM / AIA as top 5 not considered great stocks W69?

If buying into HGH at 1.80 was recommended or shall I say done by most knowing fully well what lies ahead then for me to get into KFL from 1.35 downwards is a lesser hazard ....Hazard it maybe I acknowledge but u need to do in a phased manner over range of prices and range of time and then let markets do what it wants to do ...KFL is an income investment not a get rich quick punt mates ...Want to stay invested till the next Inflation cycle starts ....lol

PS : Why KFL as income over GNE / HGH etc ....as I think ahead market will change theme from yield to growth stocks

[alokdhir]

But alokdhir isn’t the NTA premium only here because rates have been so low? Like this stock is a retiree dividend stock and has a correlation to deposit rates.

If you are buying at a premium you must think rates won’t be increasing from here?

The other issue is paying a premium in a bear market

I’m with Mike and Tim, best wait and see. Probably see a discount like the old days soon enough

As mentioned if one exited at 15 cents premium then getting back at par also seems attractive ....lol

But I do understand fully that it can become discount too, soon ....thats why I have a range of SP and time to complete my job ....maybe at 1.20 it will be 10 cents discount to NAV ....its not a very liquid stock so U need to get in slowly which helps overall always

[UkiwiS]

As mentioned if one exited at 15 cents premium then getting back at par also seems attractive ....lol

But I do understand fully that it can become discount too, soon ....thats why I have a range of SP and time to complete my job ....maybe at 1.20 it will be 10 cents discount to NAV ....its not a very liquid stock so U need to get in slowly which helps overall always

Looks like the day might have arrived. We'll find out today for certain.
It's crazy that the stock is down 10% in the last week and might now be in the buyback zone.

[alokdhir]

https://www.nzx.com/announcements/400918

Wow as expected KFL NAV didnt fall but risen while SP dived from 6% premium to 6% discount

I think I did alright as my average price is 1.285 while NAV is 1.3376 so didnt buy at premium ...I am happy buying KFL portfolio at discount !!:cool:

[ronaldson]

If the current NAV is maintained the next quarterly dividend will be paid at 2.675c per share. Looking back to Q4 2021 that dividend was 3.67cps, and Q3 2022 was paid at 2.83cps.

A falling NAV means you need to reduce your dividend expectation, given it is calculated at 2% of NAV.

[ronaldson]

What can be looked forward to positively with KFL is that once the Warrants (KFLWG) expire on 18 November the stage is potentially set for a further issue of Warrants, as MLN did recently. There is a probability, depending upon the terms of issue, that the new warrants, which should then trade under ticker KFLWH, will have quite a bit of value as the KFL portfolio/share price should have more upside than downside from here and natural market volatility will offer opportunity to trade before the new exercise date.

These regular warrant issues are like bonuses to holders.

[mike2020]

Fair call. If they trade at 10 cents and you buy at $1.25 that's a 1.25% bonus. I'm willing to call that a wash in todays market. It really does depend on where you see the market 6 to 12 months from now. Recession?

[mike2020]

Well I got that wrong big time. I think Beagle must be using up his cash.

[alokdhir]

Well I got that wrong big time. I think Beagle must be using up his cash.

U did not get it wrong ...it went to 6% discount to NAV ...its still not out of the woods just up on very low vols above 1.30

Also Mr B never invests in funds as he thinks its a waste of money to pay fund managers for job which he can do better himself ....lol

[mike2020]

Now I am completely bewildered. Back above NTA. In an environment of rising interest rates and depreciating share prices I would have presumed capital could be easily be eroded. What am I missing? I have only had KFL in a "stable" and rising share market.

[SPC]

Share price is directly correlated to its major holdings, particularly Mainfreight.

[mike2020]

Yes, that is a simple answer.

[alokdhir]

I am very happy I did not try to time the market or the bottom to the last cent and got major chunk of my requirements at average of $ 1.285 and in hindsight it turned out to be below NAV too ...so didnt pay premium to get this great stock with superb portfolio . Delighted to be back again in KFL big time my preferred income choice for the foreseeable future

[mike2020]

Well done, I seriously expected it to go into the teens with rising interest rates and progressively lower NTAs.

[Rawz]

It’s not over yet Mike

[alokdhir]

It’s not over yet Mike

I also think its still possible to get it below NAV if we have another leg down after this rally phase ...but that will be data dependent ...what market knows its already in the price ...if something bad comes up in data or otherwise then only...

[alokdhir]

When u have stocks like MFT / IFT / FPH / SUM / AIA as top 5 ....then KFL is formed .

All have great long term prospects ahead plus these are the companies which will weather the storm ahead if any much better then other smaller companies

Its very possible we actually get a soft landing ...slow yes ie Inflation above target for longer but not big recessions thus good companies may come out much better then at present anticipated ...all due to very good employment rates world over . Will see moderation of inflation over a longer time though

IMHO KFL companies can do much better then others in such environment

[mike2020]

Alok, I looked at the 1 and 2 years for all their holdings plus the divs and NTAs last week when it got into the $1.20s and it looked a little bleak. That's what made me question what effect paying a percentage of NTA would have in a depreciating sp environment. My guess for it being back in vogue this week is simple, some people have given up trying to manage their own portfolio. I know how they feel ;)
I also looked at the 10 year and that was a revelation. Also they seem to have taken a back seat approach over the last couple of years, which to be fair is understandable, the hold tight do nothing policy is public knowledge now with kiwi saver. I look forward to the warrant results.

I do hope they do another warrant issue asap.

[alokdhir]

Alok, I looked at the 1 and 2 years for all their holdings plus the divs and NTAs last week when it got into the $1.20s and it looked a little bleak. That's what made me question what effect paying a percentage of NTA would have in a depreciating sp environment. My guess for it being back in vogue this week is simple, some people have given up trying to manage their own portfolio. I know how they feel ;)
I also looked at the 10 year and that was a revelation. Also they seem to have taken a back seat approach over the last couple of years, which to be fair is understandable, the hold tight do nothing policy is public knowledge now with kiwi saver. I look forward to the warrant results.

I do hope they do another warrant issue asap.

For me the main reason it came back with a bang is that after a long while its SP was below NAV ....like me many others wanted to get in but were not ready to pay premium to NAV ...My aim was not to get the lowest SP but get in below NAV as I am super happy to hold their portfolio of stocks anyday ...as and when market recovers KFL stocks will outperform the markets ...which can be seen from last few days of rally

Also if u so worried about depleting capital due to regular payouts in depreciating markets then u can choose to do DRP and return to cash payouts only when markets improve ....but I have seen it doesn't matter much in the long run as I have been holding since 2010 . Its cousins MLN and BRM are still at significant premium so KFL will have support ahead .

Today expecting its NAV around 1.39 too

Warrant issues will be regular feature as increases corpus thus beneficial to fund mangers too ...as long as they are not discount to NAV they are bonuses to holders too without any trickery needed

[blackcap]

For me the main reason it came back with a bang is that after a long while its SP was below NAV ....like me many others wanted to get in but were not ready to pay premium to NAV ...My aim was not to get the lowest SP but get in below NAV as I am super happy to hold their portfolio of stocks anyday ...as and when market recovers KFL stocks will outperform the markets ...which can be seen from last few days of rally

Also if u so worried about depleting capital due to regular payouts in depreciating markets then u can choose to do DRP and return to cash payouts only when markets improve ....but I have seen it doesn't matter much in the long run as I have been holding since 2010 . Its cousins MLN and BRM are still at significant premium so KFL will have support ahead .

Today expecting its NAV around 1.39 too

Warrant issues will be regular feature as increases corpus thus beneficial to fund mangers too ...as long as they are not discount to NAV they are bonuses to holders too without any trickery needed

The thing is with these stocks, if the premium to NTA becomes too much, all you need to do is go to the Annual Report, write down their holdings and % of each and just replicate the portfolio yourself. Sharesies gives you the ability if you don't have enough money otherwise for the diversification. Easy peasy and you pay a lot less than buying KFL on market.

[SPC]

Well I bought KFL on market last week at below NTA at $1.28 so I effectively I bought a basket of their holdings in one single trade at a great price offering approx 8% pa in divs.
What could possibly be simpler than that...buying over a dozen separate stocks...yeah nah.
Not to mention the tax simplicity with the pie structure. Gosh I love them even more.

[blackcap]

Well I bought KFL on market last week at below NTA at $1.28 so I effectively I bought a basket of their holdings in one single trade at a great price offering approx 8% pa in divs.
What could possibly be simpler than that...buying over a dozen separate stocks...yeah nah.

Yeah if you buy at below NTA all good. When these products were/are trading at 10+% premiums to NTA it makes no sense.

[SPC]

Well I'd like to see comparable div returns over a year from the individual holdings vs 8% pa from KFL to see how individual holdings stack up. I've never done that ..has anyone out of interest?

[Rawz]

Well I'd like to see comparable div returns over a year from the individual holdings vs 8% pa from KFL to see how individual holdings stack up. I've never done that ..has anyone out of interest?

suppose one could do that by selling some of their holdings. thats what KFL are doing.
Because their portfolio of stocks dont generate enough dividends to pay you 8% so they must sell some holdings.

lucky Fisher fund are gurus and know which ones to sell

[mike2020]

Every gambler knows that the secret to survivin'
Is knowin' what to throw away and knowing what to keep (https://genius.com/1516813/Kenny-rogers-the-gambler/Every-gambler-knows-that-the-secret-to-survivin-is-knowin-what-to-throw-away-and-knowing-what-to-keep)
'Cause every hand's a winner and every hand's a loser (https://genius.com/2438086/Kenny-rogers-the-gambler/Cause-every-hands-a-winner-and-every-hands-a-loser)
And the best that you can hope for is to die in your sleep (https://genius.com/1516806/Kenny-rogers-the-gambler/And-the-best-that-you-can-hope-for-is-to-die-in-your-sleep)

[justakiwi]

Not feasible for small shareholders like me. Would take way too long to build each of those holdings up to a decent level. My disposable funds would be spread too thinly. KFL pays quarterly dividends, offers DRP, and regular warrants issues. I don't have a huge amount, but DRP and warrants have made a significant difference to the number of shares I now hold. I have never bought any additional shares at market price - KFL just sits there and takes care of itself. Having said that, if I had some spare cash right now, I'd be adding more on the dips.


The thing is with these stocks, if the premium to NTA becomes too much, all you need to do is go to the Annual Report, write down their holdings and % of each and just replicate the portfolio yourself. Sharesies gives you the ability if you don't have enough money otherwise for the diversification. Easy peasy and you pay a lot less than buying KFL on market.

[alokdhir]

Every gambler knows that the secret to survivin'
Is knowin' what to throw away and knowing what to keep (https://genius.com/1516813/Kenny-rogers-the-gambler/Every-gambler-knows-that-the-secret-to-survivin-is-knowin-what-to-throw-away-and-knowing-what-to-keep)
'Cause every hand's a winner and every hand's a loser (https://genius.com/2438086/Kenny-rogers-the-gambler/Cause-every-hands-a-winner-and-every-hands-a-loser)
And the best that you can hope for is to die in your sleep (https://genius.com/1516806/Kenny-rogers-the-gambler/And-the-best-that-you-can-hope-for-is-to-die-in-your-sleep)

Best part about buying KFL below NAV is that its not Gambling ...its simple Investing .

[mfd]

Best part about buying KFL below NAV is that its not Gambling ...its simple Investing .

It should be a relatively simple calculation to calculate the required discount to make up for the ongoing management fees. Add on any premium you attribute to simplification, the automated selling of your holdings for regular cash payments, and the excitement of warrants and you have your acceptable buy-in discount. For me, those benefits don't give me any value so I'd want a decent discount but others will have different opinions. I'd have thought the cheap brokers like Sharesies which make small trades extremely viable and allow automatic investment plans have reduced some of the appeal.

[alokdhir]

It should be a relatively simple calculation to calculate the required discount to make up for the ongoing management fees. Add on any premium you attribute to simplification, the automated selling of your holdings for regular cash payments, and the excitement of warrants and you have your acceptable buy-in discount. For me, those benefits don't give me any value so I'd want a decent discount but others will have different opinions. I'd have thought the cheap brokers like Sharesies which make small trades extremely viable and allow automatic investment plans have reduced some of the appeal.

Why people keep forgetting that top tax rate for direct dividends of some people with lots of stocks is 39% incremental ...for such persons its a great advantage of owning good stocks thru a listed Pie structure thus taxed at max 28% ...KFL has many advantages for many different types of people but not that attractive for market enthusiasts who can do better DIY with relatively smaller allocations .

[blackcap]

Not feasible for small shareholders like me. Would take way too long to build each of those holdings up to a decent level. My disposable funds would be spread too thinly. KFL pays quarterly dividends, offers DRP, and regular warrants issues. I don't have a huge amount, but DRP and warrants have made a significant difference to the number of shares I now hold. I have never bought any additional shares at market price - KFL just sits there and takes care of itself. Having said that, if I had some spare cash right now, I'd be adding more on the dips.

Hi JK, it is feasible for small investors these days. Sharesies allows you to buy $1 worth of shares if that is what you want to do. And its affordable. But it does involve some work.

[justakiwi]

Yes I realise that, but the point I was making (for my personal situation) is that realistically, I can only spread what disposable income I have, across X number of holdings. If I spread that money too thinly, it will take a very long time for me to build individual holdings to any kind of significant level, where I can make the most of dividends/DRP/warrants issues. I currently hold USF, one unlisted company, and six companies. I can only afford to contribute regularly to four of them, on my part time income. So I have chosen the bottom four, in terms of size of holding, and am focussing for now, on building them up to my perceived "decent" level. If I were to do what is suggested and invest in the individual KFL companies, it would take me many years to build them up even 5000 shares each. I realise my situation is so far from the norm for ST it is almost ridiculous, but I have to work with what I have.

Having said that, for someone with significant disposable income/funds to invest, you are no doubt correct. But for me, and others in similar positions, KFL provides a very good level of diversification, excellent dividend returns, and the ability to add to our holdings via DRP and warrants (generally at a very discounted price). Same goes for BRM which I also hold. I do understand that it comes at a cost, but I'm ok with that as it serves my individual purpose very well.

The "work" isn't the issue. The low earnings capacity/disposable income, is.


Hi JK, it is feasible for small investors these days. Sharesies allows you to buy $1 worth of shares if that is what you want to do. And its affordable. But it does involve some work.

[blackcap]

The "work" isn't the issue. The low earnings capacity/disposable income, is.

If the work is not the issue, and with Sharesies able to fractionalise share holdings, then your argument you posted does not make sense for me. You can still replicate your KFL holding yourself and have exactly the same make up as if you purchased KFL stock. But you would be able to get more for the same amount of money if and when KFL are trading at a premium to NTA.

[justakiwi]

I'm not doing a very good job of explaining this am I? ;)

I'm 62, working part time only - my fortnightly nett income is around $850 on an average fortnight, and maybe $1100 on a good one (if I have picked up extra shifts). I live a minimalistic life as you know, so my expenses are significantly lower than if I owned a house, but I still have to pay rent, electricity, insurances, laundry costs plus the usual living expenses such as groceries, petrol, medical, clothing and whatever else. I put funds aside each pay period, for emergency costs (my emergency fund), am contributing to a car replacement account (saving to replace my car at some point in the future - used of course) - which leaves me with $100 to invest per fortnight. That's literally all I can do. So right now, that $100 is split between my bottom four holdings as I said - USF, GNE, HGH and BRM. I cannot currently afford to add to my remaining four holdings.

Were I to add even the top 5 KFL companies to my portfolio, that $100 fortnight, would have to be split even further. Of course, I guess I could ditch my current holdings, and invest in the KFL five only, but that's not a realistic option for me, especially in today's economic/market conditions. I am currently not even contributing to KFL, but it is still "earning" me additional shares via DRP. Not many but enough for my total (capital gain plus dividends) return to always be positive. I have three years before I turn 65. There is no guarantee I will be able to continue working at that time - my job is physically demanding, and my knees are already giving me trouble (nothing specifically wrong with them - just aging and being on my feet all shift). So who knows? But regardless, my income will never be higher than it is now. At the rate prices are increasing, my disposable income is likely to reduce, which will mean my investing funds will be the first to be affected. I bought a supermarket bag of groceries yesterday - one of those reusable bags - and it cost me over $80! My weekly grocery budget is $70 (there's only me remember).

My biggest problem is, I am very late to the investing party. My biggest regret is not starting way earlier. I went into it fully aware that I'm at a time disadvantage, knowing full well that my investing goals were/are simply to add some financial security, not wealth. Gotta be realistic about this stuff. If I were even twenty years younger, I would 100% agree with you, and it might well be something I'd seriously consider.

Sorry, I got a little side tracked there.


If the work is not the issue, and with Sharesies able to fractionalise share holdings, then your argument you posted does not make sense for me. You can still replicate your KFL holding yourself and have exactly the same make up as if you purchased KFL stock. But you would be able to get more for the same amount of money if and when KFL are trading at a premium to NTA.

[Snow Leopard]

If the work is not the issue, and with Sharesies able to fractionalise share holdings, then your argument you posted does not make sense for me. You can still replicate your KFL holding yourself and have exactly the same make up as if you purchased KFL stock. But you would be able to get more for the same amount of money if and when KFL are trading at a premium to NTA.

I am with you on this if you can factionalise and chuck $1 at a stock you do a top 50 for $50. [Not a recommendation]

And $50 is $50 whether you invest it in 1 stock or 50 stocks.
Where that $50 goes in the future is, of course, a different matter.

[justakiwi]

Ok, I suck at maths but when I have more time I will try to work this out.

Let's assume I invest $5000 - split between the top 5 companies in the KFL portfolio. What would the total dividend payout be, compared to the total KFL payout, for the same amount invested? Assuming a cash dividend, not DRP for the purposes of the exercise.





I am with you on this if you can factionalise and chuck $1 at a stock you do a top 50 for $50. [Not a recommendation]

And $50 is $50 whether you invest it in 1 stock or 50 stocks.
Where that $50 goes in the future is, of course, a different matter.

[blackcap]

Ok, I suck at maths but when I have more time I will try to work this out.

Let's assume I invest $5000 - split between the top 5 companies in the KFL portfolio. What would the total dividend payout be, compared to the total KFL payout, for the same amount invested? Assuming a cash dividend, not DRP for the purposes of the exercise.

Now you are confusing me.

If you would normally invest $100 into KFL, you can also split that $100 up and buy the underlying shares that KFL holds on Sharesies with that same $100.

If KFL are trading at a premium to NTA, then you get more bang for your buck buying the underlying stock on Sharesies. That stock will also give you dividends etc that you can reinvest. (you won't get any warrants, but in my opinion they are a red-herring).

[justakiwi]

What I’m asking is … would the total annual dividend be exactly the same if I held $5000 split between all the companies in the KFL portfolio, as it would if I had $5000 invested in KFL?

Im confusing myself now, so will go work and work this all out later.


Now you are confusing me.

If you would normally invest $100 into KFL, you can also split that $100 up and buy the underlying shares that KFL holds on Sharesies with that same $100.

If KFL are trading at a premium to NTA, then you get more bang for your buck buying the underlying stock on Sharesies. That stock will also give you dividends etc that you can reinvest. (you won't get any warrants, but in my opinion they are a red-herring).

[Snow Leopard]

Ok, I suck at maths but when I have more time I will try to work this out.

Let's assume I invest $5000 - split between the top 5 companies in the KFL portfolio. What would the total dividend payout be, compared to the total KFL payout, for the same amount invested? Assuming a cash dividend, not DRP for the purposes of the exercise.

OK. $1000 in each, average gross div rate is a shade over 2%, so $100 less tax.
But I would suggest this is immaterial to the discussion.

[mfd]

What I’m asking is … would the total annual dividend be exactly the same if I held $5000 split between all the companies in the KFL portfolio, as it would if I had $5000 invested in KFL?

Im confusing myself now, so will go work and work this all out later.

The dividend of the individual holdings would be much smaller than the KFL dividend. Holding through KFL means they sell somewhere between 1-2% of the shares each quarter to make up the difference and fund a larger dividend. You would be able to do the same with individual holdings if you wanted, with whatever timetable and magnitude you wanted.

[Snow Leopard]

What I’m asking is … would the total annual dividend be exactly the same if I held $5000 split between all the companies in the KFL portfolio, as it would if I had $5000 invested in KFL?

Im confusing myself now, so will go work and work this all out later.

No. KFL get the same divvies you would get owning the shares direct but they bulk it up by selling some of the holding if necessary. Which you could do.
If you go for the DRiP with KFL then it is a weird merry-go-round.

[SPC]

I doubt very much you could match the return after trade fees and personal time.
The bulk up to 8%pa of nta is also capital return often so that portion is tax free. I expect they top off and top up all the time, couldn't be bothed trying this myself.

[ronaldson]

At last the Warrants listed as KFLWG have expired and we should have an announcement soon if there has been any take-up (there shouldn't be given the exercise price, but there often are those who throw their money away).

Importantly that now clears the way for another warrant issue, which it is to be hoped the Board will initiate very soon given the share price fall over the last 12 months. if so the warrant price in the current market circumstances would be interesting. Something to look forward to just now.

KFL trading at $1.37 currently cum a 2.86c dividend paid next month, with the last NTA about $1.38 per share.

[ronaldson]

There you are. 133,568 warrants exercised despite publicity not to do so, although this is a lesser number than I anticipated. All that can be said is that it is a small win for existing holders, albeit hugely uneconomic for those who did so.

But bring on the next warrant issue.

[alokdhir]

https://www.nzx.com/announcements/402833

Only 133568 converted @ 1.90 ...wow ...someone paid extra $70,000 to other KFL holders !!!! Thanks for the gift mate

[SPC]

Anything to boost NTA is good with me 😉

[alokdhir]

KFL doing well these days ...NAV is outperforming NZX50 by big margins ....Voting vs Weighing effect finally coming to front

Its portfolio of MFT / IFT / FPH / SUM / AIA is very well positioned for market recovery when ever it will happen . Now SP following NAV at a small discount which is also positive

Very happy to get into it big time during its last forays towards 1.25 for sustainable and growing yield :t_up:

[alokdhir]

Latest NAVs are showing that BRM / MLN still at 8% premium while KFL is almost at NAV ...maybe people ready to still pay premium for offshore diversification ....

[ronaldson]

And we KFL holders are waiting for the next warrant issue to be announced, whereas there are MLNWF already trading, expiring 10/11/23, and BRMWG already trading expiring 26/05/23.

At a minimum, a warrant issue is like another tax-free dividend for the year, over and above the quarterly payments already on offer.

[alokdhir]

And we KFL holders are waiting for the next warrant issue to be announced, whereas there are MLNWF already trading, expiring 10/11/23, and BRMWG already trading expiring 26/05/23.

At a minimum, a warrant issue is like another tax-free dividend for the year, over and above the quarterly payments already on offer.

Exactly ..its doing pretty well on NAV front too ...I am really pleased with its stocks portfolio and how it converts growth stocks to tax free or shall I say tax paid yield ...its my defensive yield play for next year ...FPH / IFT / AIA shud help it most ....fingers crossed

[Rawz]

I wonder what the nav vs sp will be when term deposits go to 8%?

[alokdhir]

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

3.2% up NAV in just one week ...wow ...thats great growth stocks working for u ...Great convertor of growth stock's appreciation into tax efficient yield !!

[ronaldson]

Yes, 4.5cps increase in NTA in a week is massive. I will have to look at which holdings were the main drivers, but MFT will be one.

[alokdhir]

After todays big up move of FPH ...now it must be its No1 holding and NaV must close to 1.45 !! :t_up:

[alokdhir]

Whats the buzz on KFL ? Is it again trying to go premium to NAV ?? Or expectations of new Warrant issue nearby is the reason for this sudden up move ....

Surely the sellers are missing ...Maybe makes sense to hold to a great portfolio ...but hopefully not premium again so soon !!!

[Not too Flash]

NAV 1.47 - above Share price again ....

[alokdhir]

NAV 1.47 - above Share price again ....

Cool bargain then plus maybe a free warrant also coming this qtr ...soon market will catch the drift

[epower]

Can someone please explain to me what the pros and cons are of investing in KFL via a broker vs going direct to fisher funds and investing in their NZ growth fund?

[Sideshow Bob]

Can someone please explain to me what the pros and cons are of investing in KFL via a broker vs going direct to fisher funds and investing in their NZ growth fund?

I don't think you can invest directly with Fisher Funds for their listed funds like Kingfish?

https://kingfish.co.nz/investor-centre/how-do-i-invest

[777]

I don't think you can invest directly with Fisher Funds for their listed funds like Kingfish?

https://kingfish.co.nz/investor-centre/how-do-i-invest

https://fisherfunds.co.nz/funds-and-performance/new-zealand-growth-fund

This is what poster was referring to.

[Rawz]

Probably not much difference other than Fisher Funds you need $500k minimum is it? im sure ive read that.

also the listed funds trade at a premium so need to factor that in. but you do get free warrents and can reinvest dividends at a discount.

Maybe easier to buy and sell on market? not sure.

[epower]

Probably not much difference other than Fisher Funds you need $500k minimum is it? im sure ive read that.

also the listed funds trade at a premium so need to factor that in. but you do get free warrents and can reinvest dividends at a discount.

Maybe easier to buy and sell on market? not sure.

It’s $2000 minimum and/or $100 per month.

Warrants I suppose no different than simply putting a lump sum into their managed fund.

[Snoopy]

Can someone please explain to me what the pros and cons are of investing in KFL via a broker vs going direct to fisher funds and investing in their NZ growth fund?

They are looked after by the same management team. But there are some differences in the Fisher NZ Growth Fund elements and the listed Kingfish as can be seen in my post here:

https://www.sharetrader.co.nz/showthread.php?10315-NZ-Fund-Managers&p=956476&viewfull=1#post956476

There are no warrants associated with Fisher NZ Growth fund, and no dividends IIRC. But you could sell off a small proportion of your Fisher NZ Growth Fund each year if you wanted to get an income from them! That is effectively what Kingfish do, to give shareholders their 'dividend stream' each year.

Another difference is that if you sell or buy shares in the Fisher Growth Fund , those transactions will always be at asset backing. By contrast Kingfish shares may trade noticeably above or below asset backing based on market sentiment.

SNOOPY

[alokdhir]

There is massive tax advantage of listed PIEs ...check that out on IRD website ...KFL is a listed PIE

Also portfolio is not exactly the same ...KFL doesn't have SERKO and XERO

KFL has many advantages over NZ Growth fund if u looking for regular hassle free income ...with no ambiguity about tax status ...as all payments from KFL are fully final tax paid and no need include in IR3 if its not advantageous to u to do so

For growth u can choose DRP option and get added shares at 3% discount every qtr ...

Warrants are like Bonus which can be sold in the market if not looking to exercise them

Most of the time KFL trades just below NAV but has T+2 liquidity of stocks but u need pay brokerage on KFL trades both ways ...

[Snoopy]

There is massive tax advantage of listed PIEs ...check that out on IRD website ...KFL is a listed PIE


Unlisted PIEs have the the same tax advantage and Fishers NZ Growth Fund is one of those.

SNOOPY

[epower]

They are looked after by the same management team. But there are some differences in the Fisher NZ Growth Fund elements and the listed Kingfish as can be seen in my post here:

https://www.sharetrader.co.nz/showthread.php?10315-NZ-Fund-Managers&p=956476&viewfull=1#post956476

There are no warrants associated with Fisher NZ Growth fund, and no dividends IIRC. But you could sell of a small proportion of your Fisher NZ Growth Fund each year if you wanted to get an income from them! That is effectively what Kingfish do, to give shareholders their 'dividend stream' each year.

Another difference is that if you sell or buy shares in the Fisher Growth Fund , those transactions will always be at asset backing. By contrast Kingfish shares may trade noticeably above or below asset backing based on market sentiment.

SNOOPY

Excellent thank you very much

[alokdhir]

Unlisted PIEs have the the same tax advantage and Fishers NZ Growth Fund is one of those.

SNOOPY

" What makes listed PIEs different to multi-rate PIEs?Unlike distributions from multi-rate PIEs, dividends paid by listed PIEs are taxable, and are not taxed at your PIR. Listed PIE dividends often include tax credits such as imputation credits, which are calculated based on a 28% tax rate. So even though you don’t need to include listed PIE dividends in your tax return, if your tax rate is less than 28% you can choose to report this income on your tax return in order to claim the excess tax credits. "

[alokdhir]

Who is so desperate to get out of KFL today and recently too ....Normally its pretty buoyant before going ex dividend but today was very special ...huge volumes and relentless selling much below NAV ....maybe someone knows something or just switching investments ??

[777]

A big holder reducing their holdings I figure. Has been going on for a few months. Nearly bought some more in the auction tonight but I have far more than I should.

[alokdhir]

Someone is still selling KFL relentlessly ....almost 10Cents discount to upcoming NAV tomorrow ...

Hopefully nothing wrong with Fisher Funds ?? lol ...maybe they had accounts in CS or SVB !!!!

Not able to figure out the motive of this huge selling ...maybe Carmel Fisher cashing out her huge holdings which she accumulated over the period as bonuses for performance ....

[Rawz]

Yes looks to be out of favour

KFL div yield = 9.88%
MLN div yield= 8.81%
BRM div yield= 7.94%

[alokdhir]

I just remembered that KFL has a Buy Back in place when it goes below 8% from NAV ...today when NAV comes almost close to last weeks ie 1.35-36 then it will be very close to 8% discount ...so support will come around 1.25 levels ....

[ronaldson]

Still hoping for a Warrant issue announcement after the current dividend is paid and before the next, given both MLN and BRM have warrants presently on issue. With the SP depressed just now any green shoots looking forward would make for a lot of trading interest whilst the extended period to warrant expiry is occurring. Regular issues of Warrants are one of the reasons why holding these particular shares can be more attractive than other equities and entering a new financial year may be a trigger?

[Rawz]

is there any science behind the warrant issues?

[justakiwi]

Unfortunately the BRM warrants are more than likely going to go the same way last year's KFL warrants went. They just won't be worth exercising. Which is a real shame, and highly unusual for the Fisher trio. Warrants have up until now, been the number one way I have grown my holdings.


Still hoping for a Warrant issue announcement after the current dividend is paid and before the next, given both MLN and BRM have warrants presently on issue. With the SP depressed just now any green shoots looking forward would make for a lot of trading interest whilst the extended period to warrant expiry is occurring. Regular issues of Warrants are one of the reasons why holding these particular shares can be more attractive than other equities and entering a new financial year may be a trigger?

[mike2020]

is there any science behind the warrant issues?

I would say none at all. The last one was a failure and because of that I do expect them to issue one only when they can see its clearly the bottom and light coming at the end of the tunnel. I have been wondering if they can do one in under 12 months, there is opportunity around at the moment and I presume in the near future.

[Sideshow Bob]

Yes looks to be out of favour

KFL div yield = 9.88%
MLN div yield= 8.81%
BRM div yield= 7.94%

Can they maintain the divvy? I know a chunk always comes back under the DRP.

At a solid discount to NAV, starting to become interesting as a place to park some cash.....

[Rawz]

Can they maintain the divvy? I know a chunk always comes back under the DRP.

At a solid discount to NAV, starting to become interesting as a place to park some cash.....

Yes easy as. Just sell more MFT and FPH shares (or other holdings). the dividend can run forever as long as they manage to get NAV returns over 8%

[mfd]

Can they maintain the divvy? I know a chunk always comes back under the DRP.

At a solid discount to NAV, starting to become interesting as a place to park some cash.....

It's a mistake to think of it as a regular dividend, as a large portion simply comes from selling holdings. You can simulate this on any share or portfolio you want to, by simply selling a few every quarter to maintain an income.

The dividend yield is purely a reflection of the discount/premium to NAV as they will always pay 8% of NAV in dividend/capital returns.

[UkiwiS]

I just remembered that KFL has a Buy Back in place when it goes below 8% from NAV ...today when NAV comes almost close to last weeks ie 1.35-36 then it will be very close to 8% discount ...so support will come around 1.25 levels ....

There's been an imbalance with a lot more on the offer than on the bid but with the price dipping below 1.30 that appears to have changed today. Perhaps it's DRP recipients selling before they get their shares?
I'm probably going to be adding to my position here.

[alokdhir]

I just remembered that KFL has a Buy Back in place when it goes below 8% from NAV ...today when NAV comes almost close to last weeks ie 1.35-36 then it will be very close to 8% discount ...so support will come around 1.25 levels ....

What a bargain buying it for last two days under 1.28 while its NAV turned out better then expected by me ...8% discount on such a great portfolio of companies is sure a steal ...lets see how long this sale lasts ...me had my pick ...almost done ...support did come around 1.25 as expected too !!

Its dividend is 2% (quarterly tax paid ) of NAV ...which is 1.3642 as on yesterday ...so at present its on better yield then 8% net after tax !!

As long as portfolio can grow 2% quarterly then dividends dont reduce NAV ...and one has 8% cushion on discount to NAV at
current SP ...

PS : As per their latest report 42% are on DRP ...so not much requirement to sell stocks too at such subdued levels

[Rawz]

Over the last 5 years the NAV return has been 9.6% annualized. So if you take the dividend your capital is growing 1.6% per year

[alokdhir]

Over the last 5 years the NAV return has been 9.6% annualized. So if you take the dividend your capital is growing 1.6% per year

Keep in mind last 5 years include 2 years of inflation fight ...so for better perspective ...try 10 years to get full spectrum ...

Also I have seen it tends to spend only 10% of the time below 1.40 of its full time span ...that makes it a big buy for me at present ...also u are taking 8% after tax dividends which will grow as NAV improves ...at present value it translates to 8.5% nett dividend due to discount to NAV as dividend is based on NAV and not SP

For growth oriented goals ...one can switch on DRP which adds further shares at 3% discount quarterly .

[Rawz]

Keep in mind last 5 years include 2 years of inflation fight ...so for better perspective ...try 10 years to get full spectrum ...

Also I have seen it tends to spend only 10% of the time below 1.40 of its full time span ...that makes it a big buy for me at present ...also u are taking 8% after tax dividends which will grow as NAV improves ...at present value it translates to 8.5% nett dividend due to discount to NAV as dividend is based on NAV and not SP

For growth oriented goals ...one can switch on DRP which adds further shares at 3% discount quarterly .

5 years is enough mate. KFL barely outperforms the index. Dont think they deserve the fees tbh. Maybe its just too hard for them dealing with the NZX, like not enough stocks for them to use their skills so they just hug the big growth stocks that make up most of the index.

Compare to BRM and fisher funds guru team get a NAV return of 11.1% over 5 years. so you get the 8% dividend and the capital grows, 3.1%. Much better and actually probably ahead of long run inflation.

MLN is a joke. They just buy the big name tech companies, META, Google, Amazon, Netflix, Microsoft. Come on why cant they find a MFT out there. When i look at their holdings i recognize most of the names. They again just buying the index. NAV return is 7.5% over the last 5 years so if you take the 8% dividend your capital is losing money!!

[mike2020]

I have had shares in all of them over the years, I prefer KFL mainly because I know what I have invested in better, the warrants have previously been a real gift. I was at Fisher Funds roadshow recently, if you ever get the chance you should go along to one. They do take a long term view. I only spoke to the BRM manager but they all spoke and took questions. One thing they did say was they MAYBE should have sold a few shares at peak but lets face it, 99% of us think that.

[alokdhir]

5 years is enough mate. KFL barely outperforms the index. Dont think they deserve the fees tbh. Maybe its just too hard for them dealing with the NZX, like not enough stocks for them to use their skills so they just hug the big growth stocks that make up most of the index.

Compare to BRM and fisher funds guru team get a NAV return of 11.1% over 5 years. so you get the 8% dividend and the capital grows, 3.1%. Much better and actually probably ahead of long run inflation.

MLN is a joke. They just buy the big name tech companies, META, Google, Amazon, Netflix, Microsoft. Come on why cant they find a MFT out there. When i look at their holdings i recognize most of the names. They again just buying the index. NAV return is 7.5% over the last 5 years so if you take the 8% dividend your capital is losing money!!

OK ...your views ...not mine ...I am super happy to use stable and quality portfolio KFL for my retirement income rather then keep jumping in and out of stocks like HGH / WHS / STU / HLG / MHJ etc

See what happened to WHS which was a good yield play when your Gurus were peddling it ...when recession hits then all these will take a beating and they do become half ...so one need track them continuously and follow Gurus every day ...lol

IMO KFL guys deserve their fees as not only they have built a great portfolio but provide great tax benefits and buy and forget approach especially when its at steep discount to its underlining quality portfolio ...wont one like to buy FPH/ IFT /MFT / AIA / SUM at 8% discount today ...I sure will love that market volatility cushion ...

[Rawz]

yes i basically agree alokdhir. KFL good. BRM very good. MLN rubbish.

[alokdhir]

yes i basically agree alokdhir. KFL good. BRM very good. MLN rubbish.

From today onwards if u track KFL vs BRM ....U will notice that KFL is and was their best offering ...we will check base on this in next 2-3 years mate

Reason being they know NZ market the most ...rest is just add on ...

[Rawz]

From today onwards if u track KFL vs BRM ....U will notice that KFL is and was their best offering ...we will check base on this in next 2-3 years mate

Reason being they know NZ market the most ...rest is just add on ...

Do they thou?

BRM have outperformed KFL over the last 1y, 3y and 5 yrs.
BRM is the king of the fisher funds listed stocks

[bull....]

if your into kfl or any of them really your just playing the index performance for your returns mostly. they did well when index going up but are caught short when they go down sometime's badly eg marlin
like most of there funds in my eye's just index designed requiring little skill from manager's but designed to generate big fee's for the owners.

really should buy these type of fund's when index is in uptrend avoid when index going down

[Rawz]

if your into kfl or any of them really your just playing the index performance for your returns mostly. they did well when index going up but are caught short when they go down sometime's badly eg marlin
like most of there funds in my eye's just index designed requiring little skill from manager's but designed to generate big fee's for the owners.

really should buy these type of fund's when index is in uptrend avoid when index going down

agree, and its a double whammy on the way down because going up it builds a big premium to NAV and then on the way down its loses it and becomes a discount to NAV.

[bull....]

agree, and its a double whammy on the way down because going up it builds a big premium to NAV and then on the way down its loses it and becomes a discount to NAV.

exactly.
why it is underperforming index now

[Rawz]

so right now its the best possible time to buy :t_up:

[bull....]

so right now its the best possible time to buy :t_up:

if you believe the index is going up lol but timing would be important for these fund's as a 25% loss on your initial purchase would mean like the fund would need to go up 50% just to get back to square

[alokdhir]

agree, and its a double whammy on the way down because going up it builds a big premium to NAV and then on the way down its loses it and becomes a discount to NAV.

Your knowledge of KFL is very limited to Ultra low interest rate times ...It had 10-12% premium to NAV only once when bank rates were 0 ...never before in its 19 years history ...always been on small discount to NAV rising to bigger discount when well in the money warrants get exercised .

I hold KFL since 2010 and thus know its performance and nature pretty closely ...it had been my main source of retirement income ...but when it went to 10% premium to NAV I got out knowing fully well that it cant last and its an aberration ...made my own portfolio instead of going fully cash , which I regret as cash wud have outperformed handsomely ...but thats history ...now when it came back to normal times I am back into it big time .

Bull's views about retirement people stocks is like Rugby player trying cricket ...lol

[bull....]

Your knowledge of KFL is very limited to Ultra low interest rate times ...It had 10-12% premium to NAV only once when bank rates were 0 ...never before in its 19 years history ...always been on small discount to NAV rising to bigger discount when well in the money warrants get exercised .

I hold KFL since 2010 and thus know its performance and nature pretty closely ...it had been my main source of retirement income ...but when it went to 10% premium to NAV I got out knowing fully well that it cant last and its an aberration ...made my own portfolio instead of going fully cash , which I regret as cash wud have outperformed handsomely ...but thats history ...now when it came back to normal times I am back into it big time .

Bull's views about retirement people stocks is like Rugby player trying cricket ...lol

lol multi talented code switcher

[alokdhir]

lol multi talented code switcher

Your time horizon about market is very skewed towards tomorrow not next year even thus u keep trying to pick the bottom which normal and lesser mortals like us cant dream off...U r good in your job ...but KFL surely is not your forte mate ...pardon my honesty ...lol

At present if u looking for yield for long term keeps not sell in 7 days ...then KFL offers 8% cushion to Index fall ...means I am buying the market 8% lower ...which is the maximum it can fall ...but I do understand your view that if market goes down 8% then KFL SP may fall 10% ....but as I am in for super long term or till it comes to premium to NAV which maybe never then to me it doesn't matter as my yield is based on NAV and not SP ...thus 8% Cushion works for me

[bull....]

Your time horizon about market is very skewed towards tomorrow not next year even thus u keep trying to pick the bottom which normal and lesser mortals like us cant dream off...U r good in your job ...but KFL surely is not your forte mate ...pardon my honesty ...lol

At present if u looking for yield for long term keeps not sell in 7 days ...then KFL offers 8% cushion to Index fall ...means I am buying the market 8% lower ...which is the maximum it can fall ...but I do understand your view that if market goes down 8% then KFL SP may fall 10% ....but as I am in for super long term or till it comes to premium to NAV which maybe never then to me it doesn't matter as my yield is based on NAV and not SP ...thus 8% Cushion works for me

yes long term markets rise but who know's how long long term is
but what happens if dividend's decline in the short term