Excellent as I expected. Same fee as QVE. Fee will reduce somewhat with increased FUM. Not that much more than DJW but likely to be a far superior performer.
Good news on fees. I know you have been sitting on the fence on this one. Any announcements or policies that would rule it out or in?
It's likely to be a yes now the fees have been confirmed. I really do think this one will do well overtime. I feel much more comfortable with QVI compared to the likes of hedge funds such as ALF and CDM etc. Traditional options strategies managed well are a reliable way to generate extra income albeit with a potential dampener on capital growth. Historical performance of the unlisted version of the IML Equity Income fund has still outperformed the index. But with franking included the gap might be a bit less. Anyhow the initial investment will only be around two percent of our portfolio. If it does well I'll use the options if they're in the money to double the holding to 4%. I think that there is a strong possibility QVI will eventually trade at a premium. As stated earlier if I don't like how it's progressing I don't think I'll be having to sell it at a loss. A reminder of the following links to their existing fund as a possible indicator of future performance: http://www.iml.com.au/files/1606_IMEIF_factsheet.pdf Equity Income Fund | Investors Mutual Limited http://www.iml.com.au/files/Latest_Update_IMEIF.pdf
For those who haven't invested in new LIC IPO's note that it can in some cases take a couple of years for the dividend and franking credits to build and reach the mgr's target. Some investors seem to lose site of this and will end up selling in a year or so (sometimes at a loss) frustrated with the initial lower dividend. This is what can at times also drive down the price of the the new LIC below that of the IPO offer. I generally avoid LIC IPO's choosing to buy in later if interested when opportunistic situations like the above arise. But with QVI it's hard to know whether this will happen using much poorer performing DJW (uses similar strategy) as a guide. So in this case I will choose to participate in the IPO rather than waiting till later. I see it as a relatively conservative income producing addition to the portfolio that adds something "different" compared to most of the rest of our LICs. Each needs to do their own research of course. Anything can happen. In our case it will only be around 2% of our portfolio initially so if things don't work out it's of little consequence.
Just a reminder of a few issues with "Equity Income" funds using derivatives. An ammateur's view as usual. As per the following article it tends to support my previous posts at numerous times about the income being at the expense of capital: Media Centre - Morningstar.com.au That said like anything there are poor, average and excellent managers. IML's EI Fund appears to fall in the excellent category as per Morningstar's fund report: Fund Report - Morningstar.com.au Another issue is that of franking credits which I also mentioned awhile ago and which is also mentioned in the article. Take note that the comparison with the index is "before" the inclusion of franking credits in IML's following document. Also note the reduced level of franking that is attached to the fund's distributions but thankfully net of fees and expenses: http://www.iml.com.au/files/Latest_Update_IMEIF.pdf The franking level of the index is roughly around 80% from memory whereas the fund's level of franking on distributions is around 40%. So after franking is applied the performance gap between the two is reduced somewhat. As mentioned in the article franking is also beneficial in reducing tax payable. But even with this taken into account the fund has exhibited outperformance. However because the new QVI equivalent of the existing fund will be a company structure (LIC) hopefully the franking will be greatly increased (or fully franked) due to internal payment of tax which comes back to the investor as franking credits. So the LIC structure would appear to be a great fit for an equity income fund. Giving up some capital growth for greater income for us as retirees who are consuming our income NOW could be argued to make sense. And this LIC will be in our SMSF with zero or little tax payable. I tend to favour relatively lower income and more growth but as my wife keeps reminding me we should also be including products in the portolio that pay a bit more income NOW whilst we are young enough to enjoy spending it. And importantly it needs to be noted that this new addition to our portfolio will be a maximum of 4%. It's a compliment to the existing portfolio NOT the main game. Going back to the first article the following seems a good summary for who this new LIC might be suitable for: As for last sentence about risks. QVI's fees appear to be reasonable, they have a long and proven track record with outperformance and the franking credits will be greater thus assisting in reducing tax bills where applicable due to the LIC structure.
Thanks for sharing that @austing . There is a good lesson for everyone in that. If you have a process and conviction, stick with it. Ignore the benchmark and just do your own thing. The market is not a rational actor all of the time, so don't ape it.
When does QVI list on the ASX? Maybe someone mentioned a date, I've managed to miss it. I will probably get some a few days after it lists. IPOs seem to run quite hard at the start then often pull back a bit after the initial rush (from the few I have monitored).
Slide presentation about the "existing" managed fund that the new QVI LIC will be modelled on: https://www.slideshare.net/mobile/TomHickey13/iml-eif-key-takouts-slides
ok , they have successfully talked me out of that i already hold SKI in very nicely ( for cash exposure hold ) AST not as nice as SKI but pretty good ( especially if the NSW/AUSGrid doesn't go through ) SUN is a work in progress and will play it differently to most stocks i hold . if i wanted an option player i would have bought AMH or DJW by now . and i would suggest the utilities angle is done better elsewhere as well ( i cherry picked that sector directly ) cheers ! but thanks ( you still saved me some research time )
Anyone able to attend the QVI National IPO Roadshow? SYDNEY - THU 27 OCT Sofitel Sydney, 61-101 Phillip Street 12:15 for a 12:30 start, concluding at 1:30pm
not me , i have a natural aversion to Sydney re this LIC in particular i have yet to find a suitable role for it to play in my current strategy that means not yet, rather than never . it could easily provide a compelling buying opportunity
Sorry, I realized I only posted the Sydney one. ADELAIDE - WED 19 OCT The Playford, 120 North Terrace 12:15 for a 12:30 start, concluding at 1:30pm PERTH - Thu 20 OCT Fraser's Kings Park, 60 Fraser Ave 12:15 for a 12:30 start, concluding at 1:30pm MELBOURNE - TUES 25 OCT The Westin, 205 Collins Street 12:15 for a 12:30 start, concluding at 1:30pm SYDNEY - THU 27 OCT Sofitel Sydney, 61-101 Phillip Street 12:15 for a 12:30 start, concluding at 1:30pm BRISBANE - THU 3 NOV Sofitel Brisbane Central, 249 Turbot Street, Brisbane 12:15 for a 12:30 start, concluding at 1:30pm
no problem here , but thanks on behalf of others that may be interested . Wilson's have given me invites to their presentations as well , but won't be going there either ( despite holding WAX .)
From what I understand QVI has been put on hold for the time being. Jason Teh the portfolio mgr for IML's Equity Income strategy quit to go out on his own. So roadshows have been cancelled.
i will still keep watching though ... 27% cash well used could make this a big winner , is a little heavy on utilities , which MIGHT be a timely play different enough to be out of direct competition to established stalwarts . not big on presentations but useable investment strategies , i do like to use and study (buy a good LIC when unpopular )
