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  1. #751
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    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

  2. #752
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    Quote Originally Posted by Beagle View Post
    Really irritating, perhaps that was the idea. (Sometimes really irritating marketing is the most effective)
    Thanks for your post which is the kind of feedback I was looking for.
    You'll remember when these were trading at a deep discount to NTA, (If I remember correctly it was as much as 20% at one point).

    Three questions for you.
    1. Given clear outperformance of the investment teams appointed, (from memory about 3.5 years ago) is so different to the performance before that under the previous investment teams is some premium to NTA warranted and would you pay any premium and if so how much ?
    2. They have a capital management strategy as you know that buys shares back when they are over a 8% discount to NTA so do you think as a further addendum to that they need a new capital management strategy that sells shares when they are at more than an 8% premium to NTA ?
    3. A new policy like this would enhance overall returns for shareholders wouldn't it ?
    I know this post is not directed towards me but still I thought I should share my thoughts about your proposals

    Just like Smart shares ETF which has Vanguard as their market makers ...means they provide both sell and buy side quotes on NZX based around daily NAV of the fund . If Fisher managed listed PIEs can do something similar then it will become more market friendly and efficient . No need to issue warrants then to increase corpus as if they do well then people can continuously buy them from them only on the NZX ...so from close ended funds they become open ended but only at NZX like Smartshares .
    That will be my suggestion to them !

  3. #753
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    Yes our posts are crossing. Good inputs tho. Regarding the issue if valuing the nta vs market premium or discount Fisher also operates unlisted unit funds that are identical to the listed funds so that offers more transparency at the cost of opportunity..when it arises.
    Regarding capital management strategy..don't assume the manager wouldn't sell its own shares and buy them back where profit can be made?. Being a closed end fund the money has to be made somehow.

  4. #754
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    Maybe the manger should sell shares when they're at an 8% premium or more ?
    Ecclesiastes 11:2: “Divide your portion to seven, or even to eight, for you do not know what misfortune may occur on the earth.
    Ben Graham - In the short run the market is a voting machine but in the long run the market is a weighing machine

  5. #755
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    I assume they already do

  6. #756
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    Quote Originally Posted by SPC View Post
    I assume they already do
    Thats what I dont like ...non transparent practices ...they will be better off having very transparent and market friendly policies so that all types of investor's interest is safeguarded ...That way Smartshares ETF s have superb practices . They provide liquidity on NZX in all kinds of situations unlike Fisher Funds whose buyers run away in troubled time like in march ...it had a free fall from 175 to 105 in 15 days with hardly any volumes . Agreed all went down but they had volumes to let someone exit if they wanted ...
    Yes I know they have a very similar ...not exactly same ( It has Serko and Xero in it too ) open fund called NZ Growth Fund at Fisher Funds ..but it has 14 days turn around transactional time frame...
    Providing liquidity on NZX based on last days NAV will go a big way in making them outstanding funds for the masses .

  7. #757
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    I said I assume. Any active fund manager buys when prices are cheap and sells when they overshoot to the point of silliness. That applies to portfolio stocks and most likely the master stock as well...infact I would expect them too in my interests as a part owner of the business. Not the managers fault if the market throws up opportunities either way. March was good buying..I ran toward the fire not away. As I said earlier...work out when yo accumulate and when yo sell. That's what taking a punt on the markets is about.

  8. #758
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    And something more I need to add here. Don't confuse NAV of the underlying assets with the daily BRM/ KFL/ MLN market price. The fund mangers issue NAV data each week on a Thursday and also EOM as at 31st. What buyers and sellers trade the headline shares at is beyond the fund managers control.
    Like many holders of these shares I appreciate times when the headline shares are both under and over NAV.
    If you only wish to buy in and sell out at NAV then these listed funds aren't the correct vehicle...the unit funds would be.

  9. #759
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    Quote Originally Posted by SPC View Post
    And something more I need to add here. Don't confuse NAV of the underlying assets with the daily BRM/ KFL/ MLN market price. The fund mangers issue NAV data each week on a Thursday and also EOM as at 31st. What buyers and sellers trade the headline shares at is beyond the fund managers control.
    Like many holders of these shares I appreciate times when the headline shares are both under and over NAV.
    If you only wish to buy in and sell out at NAV then these listed funds aren't the correct vehicle...the unit funds would be.
    Have a look at Smartshares model of trading via market maker on NZX based on daily and current NAV of the ETF like TNZ / NZG/ FNZ ...then u will understand better what I am advising Fisher Funds to do with their listed PIEs .
    Their portfolio management and picks is good but their investor care is not up to scratch as they are not trying to look after all kinds of investors ...keep in mind not all investors are smart and market savvy ...they need to be protected from pitfalls of stock markets ...

    In my view for Fisher Funds this listed PIE business is too small as they have much larger corpus in other funds not listed ...so they not trying to be investor friendly .

    Where as Smartshares being a NZX promoted company has partnership with Vanguard ...the worlds largest ETF operators and with that they bring world class knowledge and experience including investor care .
    As they only follow indexes so no portfolio choosing or picking part they do but still Fisher can learn their investor care to give best of both worlds at same place .

    Here will like to highlight that in longer term say over 7 years ...KFL / BRM / MLN have not outperformed headline indexes by too big a margin ...maybe due to compounding effect of big difference in management fees .

    The most efficient stock market investment for lay or even market savvy investors is NZG which has exactly same composition as our headline index without any caps of maximum 5% like FNZ ...it follows our index fully ...if market up 2% NZG is up 2% . It has fund charges of only 0.2 % compared to KFL 1.5 % plus performance fees of 1.25% almost every alternate year .

    On 7 years term KFL returns almost matched index returns to an investor after all charges and tax . They are also PIEs so tax efficient

    Though I like the portfolio expertise of Fisher funds but want them to be more investor caring by trying to remove market or man induced aberrations in their prices . Which can be easily done if they choose to follow Smartshares model of having a continuous market maker on NZX .

  10. #760
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    Who cares if there are investors not smart and savvy. I like the way the funds are run now. If you don't then go find some that are different. Don't try and fix something that is not broken.

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