KFL - discount to diluted NAV

[MauroNZ]

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

So among all of them is still KFL your preferred ?

[Beagle]

So among all of them is still KFL your preferred ?

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

[SilverBack]

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

[justakiwi]

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

[SilverBack]

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

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

[iceman]

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

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

[justakiwi]

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

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

[winner69]

Big divie soon

[Onion]

the USF is way out of my reach price-wise

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

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

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

[justakiwi]

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

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

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

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