The naked truth about Diversified United Investment (DUI)

LMI: Diversified United Investment Limited(DUI)

Investing Recommendation: From Mar 2009 to Mar 2019, DUI's NTA outperformed VAS by 2.05% annualised. Given its exceptionally low Total Expense Ratio it is investible at higher than average discounts. The limited franking credits accumulation compared to peers is one of few downsides to this fund. Labor's franking credits change will adversely affect all LIC's (DUI, AFI, etc) with large potential tax bills if they convert to trusts but this could also provide an attractive entry point.

Trading Recommendation: Trade when discount is at least 2% greater than recent (1 to 6 months) average. Minimum Pre-tax discount advised is 8% (before undistributed franking.)

31 Mar 2019 Discount/Premium: Pre-tax -8.72%  Post-tax 7.37%

Actual NTA Performance:

DUI benchmarks performance in its annual reports. As of 30 June 2018 it reports slight outperformance over 10 years and 1.8% over 3 years:

Bell Potter's LIC Weekly Reports provide NTA performance data and have the following figures for the periods to 31 March 2019. Note: "Measurement of the LIC performance is calculated after all operating expenses, provision and payment of both income and realised capital gains tax and the reinvestment of dividends, and do not incorporate franking."

Using Excel's CAGR formula I've computed the DUI non-reinvested performance since Mar 2009 using the Pre-tax NTA as of 31 March 2009 ($2.42), 31 March 2019 Pre-tax NTA ($4.47), Dividends ($1.38 cents) and Franking (59.14 cents). Undistributed franking credits are ignored here but they aren't significant.

Actual Simple Compound Annual Growth Rate for Pre-tax NTA (non-reinvested): 10.29%

Actual NTA CAGR using Sharesight (divs reinvested)

First in Sharesight we turn on Dividend Reinvestment and set it to "Round down and track balance." Start NTA is $2.42. Then we enter a Sell trade at the end date (31 Mar 2019) at End NTA value (not share price).

- End Pre-tax NTA is $4.47

- Undistributed franking credits per share are negligible and not included (can frank ~50% of 1 year's dividend)

DUI's Comprehensive NTA CAGR from Mar 2009 to Mar 2019 is: 11.02%

- This is significantly higher than VAS at 8.97% which is partly due to the international holdings in DUI's portfolio but also other variations from the ASX300 that VAS tracks.

Actual TSR Comparison with relevant benchmark ETF:

Using Sharesight and a performance report period of 31 Mar 2009 to 31 Mar 2019 you can accurately determine like-for-like Total Shareholder Return annualised performance between investing in DUI and investing in the closest index fund to the benchmark. Dividends are reinvested for both DUI and Australian-listed index funds like VAS. Sharesight does not offer this for index funds (e.g. ACWI) listed outside Australia.

- DUI has an annualised TSR of 11.12% 

- VAS has an annualised TSR of 8.97%

- ACWI has an annualised TSR of 10.62%

Performance and Risk Impact on NTA Discount/Premium:

DUI's 11.02% NTA CAGR is substantially higher than VAS's 8.97%. Consequently, its TSR reflects this outperformance with an excellent figure over ten years of 11.12%.

Risk-adjusted returns can vary but in this case there is a known small risk difference between DUI and VAS which is the international exposure.

Selected Brief Insights:

DUI has outperformed AFI, ARG, MLT, AUI, BKI and similar over all timeframes in the last 5 years. However, its portfolio generates less franking credits than most competitors and this limits the extent of franking credits returned, which also limits the dividends payable as there's much less value in paying dividends till they can be fully-franked.

In its Interim Report to Dec 2018 it states:

<<
After payment of the interim dividend, the Company will have a modest franking account balance which would fully frank approximately half the annual dividend at the current rate of dividend per share.

>>

Management and Performance Fees:

Management Fee

Internally managed

Performance Fee

none

Extracts from most recent Annual Report, Interim Report and Prospectus:

<<

Operating expenses, excluding borrowing costs, represented 0.12% of the average market value of the portfolio, the same as last year. Including the management fees of the international exchange traded funds and Small Cap managed funds in which the Company is invested, the expense ratio was 0.15% which was the same as last year.

>>

Fee Comments:

For FY2017-18 Total Expenses before tax were $1.134m. There are no performance fees. NTA was $798.271m at 30 June 2018.

Total Expense Ratio w/o Performance fees = 0.142% of end NTA

Total Expense Ratio inc Performance fees = n/a

This Total Expense Ratio is exceptionally low and is the main reason for DUI's outperformance. It is refreshing to see an honest and complete picture of total expenses provided in the fund's own Interim and Annual Reports.

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The naked truth about PM Capital Asian Opportunities Fund (PAF)

LMI: PM Capital Asian Opportunities Fund (PAF)

Investing Recommendation: From May 2014 to Mar 2019, PAF's NTA underperformed AAXJ by 7.23% annualised. Thus, its TSR has only been 3.44% over this period. There is no reason to consider investing long-term.

Trading Recommendation: Trade when discount is at least 3% greater than recent (1 to 6 months) average. Minimum Pre-tax discount advised is 10% (before undistributed franking.)

31 Mar 2019 Discount/Premium: Pre-tax -7%  Post-tax -3.3%

Note: Undistributed franking credits would boost these discounts by ~5% (see below)

Actual NTA Performance:

PAF doesn't benchmark performance itself but the unlisted version - Asian Companies Fund - does on its Performance page:

Using Excel's CAGR formula I've computed the PAF Inception to Date (ITD) non-reinvested performance using the IPO NTA after offer costs ($0.97), 31 March 2019 Pre-tax NTA ($1.0641 after removing $0.064 of undistributed franking), Dividends (13.5 cents), Franking (5.79 cents) and Options at expiry (0 cents). Undistributed franking credits are ignored here.

Actual Compound Annual Growth Rate for Pre-tax NTA (non-reinvested): 5.48%

- The unlisted Asian Companies Fund published returns over periods longer than 3 years are all much higher than PAF's true performance over almost 5 years. It's published ITD figure of 13.7% annualised is clearly not a useful guide even if not overstated (which is very doubtful.)

Note: With divs not reinvested and using the same values as in Excel, Sharesight produces an identical 5.48% NTA CAGR. This is a nice cross-check on the consistency of CAGR calculations between simple Start to End Date ones in Excel and Sharesight's CAGR formula.


Actual NTA CAGR using Sharesight (divs reinvested, undistributed franking included)

First in Sharesight we turn on Dividend Reinvestment and set it to "Round down and track balance." Start NTA is $0.97. Then we enter a Sell trade at the end date (31 Mar 2019) at End NTA value (not share price). Note PAF has a DRP which usually has a 5% discount.

End NTA is the only debateable element:

- Pre-tax NTA is $1.0641. Post-tax NTA is $1.0234. (Both minus undistributed franking.) Given PAF is an active trader splitting it at $1.04375 is fair.
- Undistributed franking credits per share are $0.064 (see Mar 2019 report)
- So for End NTA I calculate using both $1.04375 and $1.10775

PAF's Comprehensive NTA CAGR from inception to Mar 2019 is:

6.28% annualised including undistributed franking

5.11% annualised excluding undistributed franking


Actual TSR Comparison with relevant benchmark ETF:

Using Sharesight and a performance report period of 22 May 2014 to 31 Mar 2019 you can accurately determine like-for-like Total Shareholder Return annualised performance between investing in the PAF IPO and investing in the closest index fund to the benchmark. Dividends (or option payments) are reinvested for both PAF and Australian-listed index funds like VGS. Sharesight does not offer this for index funds (e.g. ACWI) listed outside Australia.

- PAF has an annualised TSR of 3.44% using its IPO price of $1.

- AAXJ has an annualised TSR of 10.67%

- ACWI has an annualised TSR of 12.29%


Performance and Risk Impact on NTA Discount/Premium:

PAF's 6.28% NTA CAGR is way lower than AAXJ's 10.67% (which doesn't even include dividends reinvested.) Consequently, its TSR reflects this substantial underperformance at a lowly 3.44%.

Risk-adjusted returns can vary but in this case there is likely to be little risk difference between PAF and AAXJ.


Selected Brief Insights:

PAF's share price often has gaps in the order book thus presenting short-term trading opportunities.


Management and Performance Fees:

Management Fee
0.0915% per month (inc GST) which equals 1.1% per year

Performance Fee

15% of the outperformance against MSCI Asia (ex Japan) Equity Index (Net Dividends Reinvested, AUD). A  high water mark applies.

Extracts from most recent Annual Report, Interim Report and Prospectus:

<<
The Company will pay the Manager a management fee of 1% p.a. (plus GST) of the NAV of the Portfolio, which is calculated and accrued each month and paid monthly in arrears. In addition, the Manager will be entitled to receive a performance fee from the Company equal to 15% (plus GST) of the Portfolio’s net asset value outperformance of the MSCI Asia (ex Japan) Equity Index (Net Dividends Reinvested, AUD) (Performance Fee), which is calculated and accrued monthly on a pre-tax basis. Any positive performance fee amounts are payable annually in arrears.
>>

<<

The Performance Fee for each month in a Financial Year will be aggregated (including any negative amounts carried forward) and paid annually in arrears if the aggregate Performance Fee for that Financial Year (including any negative amounts carried forward) is a positive amount provided that: i. if the aggregate Performance Fee for a Financial Year is a negative amount, no Performance Fee shall be payable to the Manager in respect of that Financial Year, and the negative amount shall be carried forward to the following Financial Year; and ii. any negative aggregate Performance Fee amounts from previous Financial Years that are not recouped in a Financial Year shall be carried forward to the following Financial Year.

>>

Fee Comments:

For FY2017-18 Total Expenses before tax were $1.135m. The performance fee was zero. NTA was $66.551m at 30 June 2018.

Total Expense Ratio w/o Performance fees = 1.71% of end NTA

Total Expense Ratio inc Performance fees = n/a

Whether the performance fee applies and over how much of the positive return is the key fee factor here. You can get some idea of the likelihood of the June 30th performance fee applying by seeing whether the Interim Report has accrued a payable amount in expectation a performance fee would apply.

The High Water Mark for PAF is around 16 March 2018 with an NTA of $1.32 after having paid a 2.5c dividend.

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Ellerston Asia Growth Fund vs EAI - The case of the disappearing returns

Summary: Many LMIs have unlisted equivalent funds where the portfolio of both is virtually identical. This can be useful for tracking LMI returns but occasionally produces interesting anomalies. In this case, Ellerston Asia Growth Fund had a 3.13% increase in NAV from 30 June 2018 to 29 March 2019 but EAI's NTA decreased by 0.26%. So where did EAI's returns disappear to?

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Errors, omissions and obscurity in LMI NTA reporting

Summary: LMIs are required to report NTA or NAV each month. However, there is no regulation, oversight or consistency in this reporting. Some LMIs exploit this lack of oversight to paint the most positive picture of their NTA and performance. In this post, I will progressively provide examples of errors, omissions, obscurity and misleading information.


Details:

1. Tax and Franking Credits add complexity. Some LMIs exploit this

"Pre-tax NTA" is typically reported after realised gains/losses but before unrealised gains/losses

"Post-tax NTA" is typically reported after both realised and unrealised gains/losses with any deferred tax assets (carried losses) also added back

Distributed franking credits are part of past total returns and performance. Undistributed franking credit balances with the ATO are not part of Net Assets and shouldn't be counted in formal NTA figures. It is fair enough to note them though especially if the LIC has a policy of maximising return of them to shareholders by paying a high dividend.

PAF provides a good example of this complexity in the 4 levels of NTA it reported in April 2016:



In 13 May 2016 the NTA report suddenly has a gap in before tax NTA due to franking credits:

Suddenly there is a gap between the "NTA before tax accruals + franking credits" and the "NTA before tax accruals." Did this gap actually emerge in a week or is this because prior reporting was incorrect? Of course, no errors or changes were every mentioned!

Now we know for the frst time that undistributed franking credits are adding 4.2 cents/share to the NTA!  (This is not something most LICs do.)

One week later in its 20 May 2016 report why not just drop the less flattering information and obscure the amount due to undistributed franking credits?

After its 30 June 2017 NTA update PAF now reports in the footnote how much it is adding to Pre-tax NTA with undistributed franking credits:

It includes a note 1:

<<
1. Includes $0.0351 of franking credits.
>>

As of 22 March 2019 PAF reports that of $1.1244 in Pre-tax NTA $0.064 is undistributed franking credits. This equals 5.7%. PAF's NTA discount on a like-for-like basis with other LICs that don't include franking balances is thus 5.7% bigger than is usually calculated and reported.

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The naked truth about Thorney Opportunities Limited (TOP)

LMI: Thorney Opportunities Limited (TOP)

Investing Recommendation: From Jan 2015 to Feb 2019, TOPs NTA outperformed VAS by 2.72% annualised. Meanwhile its TSR has been much lower as at inception it was on a premium over 20%. Unless NTA underperformance takes hold, the higher end of its recent discount ranges are worthwhile trading opportunities but the fees make this LMI uninvestible long-term.

Trading Recommendation: Trade when discount is at least 3% greater than recent (1 to 6 months) average. Minimum Pre-tax discount advised is 12%.

28 Feb 2019 Discount/Premium: Pre-tax -12.75%  Post-tax -Undisclosed
(Note: TOP may be reporting Pre-tax NTA as Post-tax. If so, it doesn't report Post-tax NTA)

Actual Performance:

In its March 2019 Chairman's Update TOP reports the following performance graph but no numbers to check:

Using Excel's CAGR formula I've computed the actual TOP Inception to Date (ITD) performance using the post-restructure NTA at 31 Jan 2014 ($0.475), 28 Feb 2019 Pre-tax NTA ($0.745 - TOP quotes $0.785 but this seems as if it may not include tax on realised gains), Dividends (4.4 cents), Franking (1.9 cents) and Options at expiry (0 cents).

Actual Compound Annual Growth Rate for Pre-tax NTA: 11.03%

- This is an impressive ITD figure especially given the outrageous fees but the query is whether there will ever be periods of such rapid NTA gains again.

- The true Pre-tax figure after realised gains ($0.745 or $0.785) will affect the result. I've used the lower figure till this is clarified.


Actual TSR Comparison with relevant benchmark ETF:

Using Sharesight and a performance report period of 7 Jan 2015 to 28 Feb 2019 you can accurately determine like-for-like Total Shareholder Return annualised performance between investing in the TOP IPO and investing in the closest index fund to the benchmark.

- TOP has an annualised TSR of 3.39% using its 31 Jan 2014 share price

- VAS has an annualised TSR of 8.31%

- VSO has an annualised TSR of 8.61%

- TOP's ITD TSR has been massively reduced by the starting price of $0.585 which is a 23% premium to its Starting NTA.


Performance Impact on NTA Discount/Premium:

TOP has an NTA CAGR of 11.03% compared to 8.31% for VAS. Meanwhile, TOP's ITD TSR has only been 3.39%. Since inception, with more sensible entry prices, TOP TSR has been much closer to NTA performance.

I expect that, if it continues to at least match VAS, the higher end of its discount ranges will be good buying opportunities to trade. But the outrageous fees mean you should limit your holding period to short term trades.


Management and Performance Fees:

Management Fee

1.65% per annum (inc GST) of gross assets (not net assets!) calculated half yearly

Performance Fee

20% of the total (not excess to a benchmark!) increase in net asset value net of base fee for the year. No high water mark applies. Calculated annually.

These fees are among the most rapacious of any Australian fund, listed or unlisted. Thus, I would strongly advise against holding TOP or TEK for more than a 6 month period.

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The naked truth about Contrarian Value Fund (CVF)

LMI: Contrarian Value Fund (CVF)

Investing Recommendation: From Jan 2015 to Feb 2019, CVF's NTA outperformed VAS by 3.29% annualised. Meanwhile its TSR has been much lower, especially since Oct 2018. Unless underperformance takes hold, the higher end of its recent discount ranges are worthwhile investing opportunities while performance fees remain ineligible due to not clearing the indexed high watermark.

Trading Recommendation: Trade when discount is at least 3% greater than recent (1 to 6 months) average. Minimum Pre-tax discount advised is 15%.

28 Feb 2019 Discount/Premium: Pre-tax -15.7%  Post-tax -14.29%

Note: Undistributed franking credits would boost these discounts by 5% (see below)

Actual NTA Performance:

In its Feb 2019 monthly report CVF reports the following performance:



Using Excel's CAGR formula I've computed the CVF Inception to Date (ITD) non-reinvested performance using the IPO NTA after offer costs ($0.976), 28 Feb 2019 Pre-tax NTA ($1.21), Dividends (18 cents), Franking (5.14 cents) and Options at expiry (1.5 cents). Undistributed franking credits are ignored here.

Actual Compound Annual Growth Rate for Pre-tax NTA (non-reinvested): 10.14%

- CVFs published ITD of 14.1% net is a significant overstatement of performance. It's cumulative figure of 73.4% net is also way off and even easier to check. 1.734 * $0.976 = $1.69 yet you can see that the End NTA inclusive of dividends, franking and options value is $1.456. Even if we add undistributed franking credits (see Insights section below) of ~ 7 cents this is $1.526.

Note: With divs not reinvested and using the same values as in Excel, Sharesight produces a 10.17% NTA CAGR. The small difference being due to the specific timings of dividends and options value in Sharesight. This is a nice cross-check on the ballpark consistency of CAGR calculations between simple Start to End Date ones in Excel and Sharesight's more precise timings.

Actual NTA CAGR using Sharesight (divs reinvested, undistributed franking included)

First in Sharesight we turn on Dividend Reinvestment and set it to "Round down and track balance." Then we enter a Sell trade at the end date (28 Feb 2019) at End NTA value (not share price) and enter a "dividend" at option expiry (30 June 2016) for 1.5 cents to reflect option value. While not strictly portfolio return, option value is included to offset option dilution effects on NTA (it can be generous when option value at expiry is high given the Start NTA used is not the IPO price but the NTA after offer costs of $0.976.)

End NTA is the only debateable element:

- Pre-tax NTA is $1.21. Post-tax NTA is $1.19. Given CVF is an active trader splitting it at $1.20 is fair.
- Undistributed franking credits per share are ~ $0.07 (see Feb 2019 report)
- So for End NTA I calculate using both $1.20 and $1.27

CVF's Comprehensive NTA CAGR from inception to Feb 2019 is:

11.82% annualised including undistributed franking

10.39% annualised excluding undistributed franking


Actual TSR Comparison with relevant benchmark ETF:

Using Sharesight and a performance report period of 7 Jan 2015 to 28 Feb 2019 you can accurately determine like-for-like Total Shareholder Return annualised performance between investing in the CVF IPO and investing in the closest index fund to the benchmark. Dividends (or option payments) are reinvested for both CVF and Australian-listed index funds like VAS. Sharesight does not offer this for index funds (e.g. ACWI) listed outside Australia.

- CVF has an annualised TSR of 5.86% using its IPO price of $1.

- VAS has an annualised TSR of 8.53%

- ACWI has an annualised TSR of 10.62%
(CVF invests in overseas stocks so this is relevant too)


Performance and Risk Impact on NTA Discount/Premium:

CVF's 11.82% NTA CAGR is significantly higher than VAS's 8.53% and also exceeds ACWI's 10.62%. Meanwhile its TSR is lagging significantly at 5.86%. The TSR isn't going to improve much due to a better understanding of CVF's true performance. But if CVF gets back on track with a permanent lead portfolio manager, being mostly invested rather than in cash, and acceptable NTA growth then the current extra discount due to a cloud over future returns will dissipate.

Risk-adjusted returns will vary depending on the balance of risk priorities (e.g. minimising drawdowns or capital loss or volatility or correlation) and how this specific investment is intended to fit within a portfolio strategy (CVF would typically be chosen to complement something like VAS not replace it.) CVF's NTA variance so far justifies some risk-adjusted discount compared to VAS but its up to individual investors to determine the extent.


Selected Brief Insights:

I expect that, if it continues to at least match VAS, the higher end of its discount ranges will be good trading opportunities. However, its lead portfolio manager (Gary Hui) left under a cloud and its data scientist left at the same time. It has been mostly in cash since Nov 2018. So there is an extra discount currently being applied that predicts future returns will have little connection to past outperformance. This extra discount needs to be assessed too.

In its Feb 2019 monthly report CVF reports: "Not reflected in the NTA, is $0.06 per share worth of unused franking credits. The NTA is also net of $0.03 per share tax payable on realised gains which will generate franking credits when paid."

- This means there are around 7 cents per share of franking credits yet to be distributed. If CVF reported NTA like PAF and PGF its Pre-tax NTA would be $1.27 and discount ~20%.

- In its 31 Dec 2018 Interim Report CVF states: "A fully franked interim dividend of 2 cents per share has been declared and will be paid on the 2nd of May 2019. A review is currently underway as to the feasibility of paying a fully franked special dividend before 30 June 2019." Given its franking credits balance is so high it would certainly be in retiree investor's interests, but higher dividends reduce fund AUM and future fees.


Management and Performance Fees:

Management Fee
0.0915% per month (inc GST) which equals 1.1% per year

Performance Fee

20% of the outperformance over a hurdle - which is 8% per annum when the S&P/ASX 200 Accumulation index is positive and 0% when the benchmark is negative or zero. A rolling high watermark applies.

Extracts from most recent Annual Report, Interim Report and Prospectus:

<<
A Performance Fee is payable for a Performance Period ended 30 June, at the rate of 20% of the out performance of the Fund over an 8% per annum cumulative hurdle when the Fund’s benchmark (the S&P/ASX 200 Accumulation index) is positive and over 0% when the benchmark is negative, since the date that a performance fee was last paid.
>>

<<
The Hurdle is the greater of: – the value of the Portfolio at the end of the last Performance Calculation Period for which a Performance Fee was paid indexed by the Period Hurdle Rate for each Performance Calculation Period since that period.
>>

<<
Once a Performance Fee has been paid, no further Performance Fee can be accrued or paid unless the Portfolio’s value increases above its previous high, indexed by the Hurdle.
>>

Fee Comments:

For FY2017-18 Total Expenses before tax were $6.22m. The performance fee was $4.96m. NTA before providing for tax on unrealised positions was $82.305m at 30 June 2018.

Total Expense Ratio w/o Performance fees = 1.53% of end NTA

Total Expense Ratio inc Performance fees = 7.56% of end NTA

Whether the performance fee applies and over how much of the positive return is the key fee factor here. You can get some idea of the likelihood of the June 30th performance fee applying by seeing whether the Interim Report has accrued a payable amount in expectation a performance fee would apply.

Personally, while the fund's NTA is comfortably below the rolling high watermark figure I am happy to consider buying at higher than average discounts above 15%.

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The naked truth about Acorn Capital Investment Fund (ACQ)

LMI: Acorn Capital Investment Fund (ACQ)

Investing Recommendation: From May 2014 to Feb 2019, ACQ's NTA outperformed the Emerging Companies Index by 3.8% annualised which is substantial. Meanwhile its TSR (i.e. share price) has lagged. While outperformance continues, the higher end of its recent discount ranges are worthwhile investing opportunities.

Trading Recommendation: Trade when discount is at least 2% greater than recent (1 to 6 months) average. Minimum Pre-tax discount advised is 7%.

28 Feb 2019 Discount/Premium: Pre-tax -13.25%  Post-tax -9.67%

Actual Performance:

In its Feb 2019 monthly report ACQ reports the following performance:

Using Excel's CAGR formula I've computed the actual ACQ Inception to Date (ITD) performance using the IPO NTA after offer costs ($0.9703), 28 Feb 2019 Pre-tax NTA ($1.254), Dividends (11.5 cents), Franking (4.93 cents) and Options at expiry (0 cents).

Actual Compound Annual Growth Rate for Pre-tax NTA: 8.03% 

- ACQ's published ITD of 8.46% is before tax but ignores franking credits too. The 8.03% figure is more accurate and comparable. It's good to see its own figure isn't too far from the mark.


Actual TSR Comparison with relevant benchmark ETF:

Using Sharesight and a performance report period of 1 May 2014 to 28 Feb 2019 you can accurately determine like-for-like Total Shareholder Return annualised performance between investing in the ACQ IPO and investing in the closest index fund to the benchmark.

- ACQ has an annualised TSR of 4.93% using its IPO price of $1

- Using its first day closing price of $0.93 the TSR is 6.03%

- This example shows the ripoff most LIC IPOs used to be. You paid $1 for 97 cents of NTA and the options usually expired worthless. Yet, because most active funds underperform, LMIs tend to quickly trade at proportionate discounts to NTA based on underperformance and total costs. LMIs should only be bought after listing and when performance and discount ranges are clearer. ACQ has typically traded at a discount of 5 to 15% and the larger end of discount ranges have been worthwhile investing opportunities.

- VSO has an annualised TSR of 8.01%

- XEC (Emerging Companies Index) has an annualised TSR of 4.65%

- VAS has an annualised TSR of 7.15%

Note that ACQ reports the S&P Emerging Companies Index (XEC) as having a CAGR of 6.32% which is a fair way from 4.65%. The official S&P site suggests even less than 4.65%.


Performance Impact on NTA Discount/Premium:

ACQ's 8.03% NTA CAGR is significantly higher than XEC's 4.65% and almost identical to VSO's 8.01%. Meanwhile its TSR is lagging somewhat at 4.93% (IPO) or 6.03% (1st trading day).

I expect that, while it continues to outperform, the higher end of its discount ranges will be good buying opportunities. However, keep an eye on the comparative VAS return as the opportunity cost of investing in a market sub-index is investing in the major low-cost passive index funds.


Management and Performance Fees:

TBA...

Management Fee
 per annum (inc GST)

Performance Fee

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