Quote Originally Posted by Beagle View Post
Thanks for your thoughts and I remember the KFL warrant exercise arbitrage very well.

To my mind (at least and I accept others will have a different view) the BRM and MLN situations are different to KFL.
KFL's outperformance on average of 2.5% per annum is not especially notable or material and I would back myself to do better than that, (and have consistently done so over the years), so the benefits KFL brings to me include :-
1. Diversification of my N.Z. portfolio
2.Tax free yield.
3. Regular warrant issues which I back myself to value and take advantage of opportunities to acquire on advantageous terms when they occur.
4. Shares in lieu of dividend at a 3% discount which further boost my effective yield.
5. Expert fund manager that is beating the market after fees and costs.

On the other hand BRM and MLN's average outperformance is far more notable.
Benefits to me are far greater and include :-
1.Much greater diversification to my portfolio, both funds have a much wider spread of shares than KFL
2. Both are investing in markets that I don't invest in directly and don't have the time for the research involved
3. Substantially higher outperformance compared to their benchmark's than KFL
4. They take care of all the FIF tax hassles which would be very time consuming for me if I was to try and handle overseas investments myself
5. Tax Free PIE yield.
6. Regular warrant issues which I back myself to value and take advantage of opportunities to acquire on advantageous terms when they occur.
7. Shares in lieu of dividend at a 3% discount which further boost my effective yield.

To me the benefits of BRM and MLN are clearly greater than with KFL. Would I pay the current unprecedented premium to NTA with MLN and BRM ? No.
Would I pay some more modest premium reflecting the advantages to me of these funds in these unprecedented times of extraordinarily low interest rates ? Yes.
What is the size of the premium to NTA I would pay ? I don't know, I am trying to work that out.
Understand your requirements better now ...U know very well what works for u and why ...like the clarity of your thought process .

KFL portfolio is very easy to replicate too . But not of MLN ...
Normally I see such inefficiencies and large arbitrage possibilities during the last stages of a Bull market ...that part worries me
Though state of financial markets and stances of Central Bank and Governments is telling me ...Nothing to worry for 2-3 years at least ...but U never know