Investing Recommendation: Is too small (too small a cost base, many investors won't consider at this size) and too illiquid to be investible despite decent CAGR returns. The TSR has stubbornly underperformed more than expected and the fees are high.
Trading Recommendation: Short term only if discount is at least 3% greater than recent (1 to 6 months) average. Minimum discount advised is 15%. Trading around dividend period may be worthwhile.
Actual Performance:
In its March 2019 Investor Presentation FPP reports performance of 14%:
Using Excel's CAGR formula I've computed the actual FPP Inception to Date (ITD) performance using the IPO NTA after offer costs ($1.061), 28 Feb 2019 Pre-tax NTA ($1.1612), Dividends (4.55 cents) and Franking (0 cents).
Actual Compound Annual Growth Rate for Pre-tax NTA: 9.86%
- Note that performance fees for the current financial year will apply and don't seem to have been taken out of the NTA yet.
Actual TSR Comparison with relevant benchmark ETF:
Using Sharesight and a performance report period of 16 Oct 2017 to 28 Feb 2019 you can accurately determine like-for-like Total Shareholder Return annualised performance between investing in the FPP IPO and investing in the closest index funds (VAP, DJRE).
- FPP has an annualised TSR of -10.46%
- VAP has an annualised TSR of 12.94%
- DJRE has an annualised TSR of 10.86%
- Note that the TSR starts from the IPO price of $1.10 while the NTA CAGR starts with the offer costs taken out ($1.061). No options were issued to even partially compensate IPO investors.
The VAP and DJRE TSRs have exceeded the FPP NTA CAGR without the issues of tiny size and liquidity. This has driven the discount down to ~18% and the FPP TSR to be -10.46%.
