LIC & LIT QV Equities - LIC - Small/Mid Cap (ex-ASX 20) - Australia

Discussion in 'Shares & Funds' started by Zenith Chaos, 29th Jan, 2018.

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  1. Nodrog

    Nodrog Well-Known Member

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    Re QVE, tough times for value investors in general. You either have the patience or you don’t.
     
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  2. Snowball

    Snowball Well-Known Member

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    Bought some a couple weeks ago at a nice discount, if only my crystal ball was working! :rolleyes:
     
  3. oracle

    oracle Well-Known Member

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    Plenty of value in the big 4 banks (around 5 yr lows with 8-10% gross yields) if you want to invest in Top20 ;)

    Cheers,
    Oracle.
     
  4. Nodrog

    Nodrog Well-Known Member

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    Fair point. Probably my bias at play in that I’m a bit over banks. Got too much exposure to them already. But for those wanting more of them then perhaps a good time to buy.
     
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  5. oracle

    oracle Well-Known Member

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    @Nodrog what is ICR costs, some kind of operating costs? Looks like that is on top of management fees

    QVE_Costs.png

    Cheers,
    Oracle.
     
  6. Nodrog

    Nodrog Well-Known Member

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    Total costs including mgr fee and indirect costs from memory. With external fund Mgrs in particular the ICR is usually higher than the management fee alone. Eg add coy related costs and trading transaction costs etc to Mgr fee.
     
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  7. Goodison

    Goodison Active Member

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    I'm was extremely confused why people would purchase QVE at a premium to NTA in the period of time after it listed.. when instead surely you'd be better off chucking the money into the unlisted Investors Mutual Future Leaders fund.

    Trading at a discount i'm very happy to put dollars into QVE...

    Look at this, the unlisted version over a period of 16 years... considerably lower volatility than the benchmark and higher performance from a manager that has religiously stuck to their ethos and repeatable investment process no matter the investment environment.. you will note they have underperformed at certain periods of the cycle in the past (prior to tech wreck and prior to GFC).. they've always stayed true to their process and for me this integrity is easily worth the investment fee they charge to manage.

    This type of longterm two decade performance record does not come by luck.. it comes by repeating a robust investment process.

    Nearly all active investment managers produce portfolios that exhibit higher volatility and higher risk to the investor purely to overcome the fee structure they charge.. not at IM, lower volatility..lower investment risk.. obviously portfolio turnover is higher than the benchmark but a turnover ratio of 20-30% for this kind of midcap/smaller exposure i am comfortable with.

    Obviously these guys charge a fee for managing the money... for me .. based on their longterm approach and consistency it's worth the price and happy to stick with them due to inevitable cyclical periods where they fall below the benchmark.
     

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  8. Hodor

    Hodor Well-Known Member

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    Good points.

    Amazing what hype does to logic.

    I've don't buy into the ignore NTA and just buy, NTA is a known and there are alternatives. If you can keep your head then take advantage of NTA as you can IMO, if your plan is to DCA every quarter and you stay messing with that then you have an issue.

    I'm still happy holding QVE and will consider it at times I purchase.
     
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  9. pippen

    pippen Well-Known Member

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    BKI has fallen out of favour from PCers it seems in recent times as well!
     
  10. Hodor

    Hodor Well-Known Member

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    I am waiting for WAM to get hammered on the NTA premium collapsing, I have read plenty of articles how it is justified due to the quality of the manager etc; be a really interesting case to follow IMO.
    Maybe there are other examples of LICs out there trading at big premiums for extended periods along with old articles and forum postings. I would be interested in reading them and see the change in psychology associated.
     
  11. Silverson

    Silverson Well-Known Member

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    I think this is across the board and not limited to QVE/stocks in general. Real estate in my opinion (esp Melb/Syd) does not present value, classic cars again no value and the list continues. Again all this is just my opinion, however in euphoric times where credit is easily attainable anything people want is inflated - not true value.
    As old mate Buffett says, a rising tide lifts all boats(something along those lines).
     
  12. Nodrog

    Nodrog Well-Known Member

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    Not sure to be honest. Sometimes there’s just not much to say about a given LIC if it’s business as usual.
     
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  13. pippen

    pippen Well-Known Member

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    Seems to me that since its recent share issue and forum members worrying about effects of dilution as well as recent performance lagging due to recent materials and mining outperformance of which bki is underweight it just seemed that bki was out of favour!
     
  14. Nodrog

    Nodrog Well-Known Member

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    Being such a big capital raising I suppose it soaked up much of the recent and future demand for BKI especially given new shares issued were entitled to the subsequent dividend. And from memory the older style larger, more liquid LICs in general see increased price pressure in the lead up to the dividend then trend down again. Likely retail investors and fund Mgrs using dividend harvesting strategies etc. I posted a study on this some time ago here but can’t find it.
     
    Last edited: 6th Oct, 2018
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  15. orangestreet

    orangestreet Well-Known Member

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    I know what you mean. But for me, I am still keen on BKI. My investing is almost set on auto pilot now and keep accumulating as and when funds allow. Bought QVE on Friday and will most probably buy BKI over the coming week.

    While I still follow the discussion here, it is mostly out of habit. Like i have said before, almost everything I needed to know has been in the first few pages of the LIC and Peter Thornhill threads. I hang around to reneforce the basics of long term investing and to keep an eye for major structural changes to any of the LICs that I own.
     
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  16. Globetrekker

    Globetrekker Well-Known Member

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    Some may also have been put off by BKI's switch to external management, although its the same guys that were doing it before, and the management fee charged is significantly below what others charge (I think the fee was only 0.1% and MER was still only around 0.17% in total). But a big capital raising (at price 6% below NTA) not long after introducing a management fee based on total assets probably didn't sit well with many investors. And I guess there's always the worry that the external management fees may increase (though just to be clear, I haven't seen anything suggesting this to be the case).
     
  17. Nodrog

    Nodrog Well-Known Member

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    It’s been awhile since BKI externalised management yet it still continued to trade at a premium to NTA prior to the capital raising. Who knows why but not worth wasting energy I suppose on such things. To be honest I haven’t hardly looked at BKI since the raising. I invest in these things to let others worry.
     
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  18. Redwing

    Redwing Well-Known Member

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    BKI and MLT for our kids have been a set and forget exercise, dividends reinvested

    They are more focused on LOL toys and Minecraft at present but have been shown their returns as compared to bank interest, the oldest at 13 is at 7.59% total return over her investment term, achieved by 1.08% Cap Gain and 6.48% Income (Thanks Sharesight)
     
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  19. willy1111

    willy1111 Well-Known Member

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    I've been to a few of their shareholder updates (twice a year) and they are dominated by 2-300+ grey nomads, I'm not quite in that category just lightly salted...most of which I assume are retired who have SMSFs or personal funds invested to be self funded retirees.

    On a grossed up yield of 8.8% it is very appealing to them. I don't see them selling out in a hurry when they are getting that yield so not sure the NTA premium will collapse any time soon for WAM.
     
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  20. Islay

    Islay Well-Known Member

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    This SMSF grey nomad sold out of WAM recently. Despite the high grossed up yield I don't want to be left holding them if there is a market correction. Maybe there will, maybe there wont be but I have taken our money off the WAM table.
     
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