LIC & LIT Which LIC will be next to offer SPP

Anyone know which other LIC is likely to be the next one to offer SPP? I'm planning to drop the min. amount 500 regardless of NTA to take advantage of the SPP.

 

It's all guesswork @lamecrocs. Shareholder approval is not required for an SPP as you probably know. While SPP's and other offers come along, it's entirely up to the management as to the if and when. Only way we find out is when there is an announcement to the ASX.

I suppose if an investor can swing it, it may be best to have some funds put aside just in case but could be sitting there for a while.

 

Yes I'm fully aware of the guesswork since I've been following the LIC thread for a while now.
Any way I could find LIC list that previously offered SPP & the last SPP date? I will probably guess the ones that haven't offered SPP the longest would do so soon.
Perhaps, i should drop the min. 500 into each of the LIC. With suggestions that market will crash soon, I'm holding more cash and ready to ponder but won't lose sleep over 500

 

You can always look at the lic's website such as argo and milton and check its dividend and SPP history, and that will give u a gauge. From memory argo spp were around april one year to september the next from past history but thats not gospel!

 

I agree with the others that it is completely hit and miss. I remember when I was starting out being curious as to when an SPP would be called so that I can "take advantage". With the 4 or 5 SPPs I have now participated or paid close attention, I have come to realise that it is hardly a panacea to all my buying dilemmas and you can almost always buy it at the same price or at times better if you are patient enough. The small amount of brokerage to me is not significant enough to tilt my decision one way or the other.

Having said that, I participate whenever funds allow because it is often a good buying trigger and I just tip the maximum amount I can and then completely forget about it. For some reason, for me, buying through an SPP means less cognitive dissonance than buying on market.

 

I have a CommSec account. I go into web version (not the phone app) and look up the announcement history for your favourite LICs. I did it for WHF very quick just scrolling down. They do SPP’s every 14-16 months for 5 years +, but haven’t looked at any other LICs for regularity like that...

 

Thanks @orangestreet. That makes sense and also reading the recent posts from @dunno about the dilution etc. I might buy it on market instead of waiting for SPP but I will take advantage of SPP if necessary (as a bonus).

 

Magellan Global Trust (ASX: MGG) is offering Unit Purchase Plan (UPP) with 5% discount to the NAV.

I think this is a great offer for the existing shareholder as the fee will be covered by the fund manager so it won't be like the case of BKI which causes dilution/outrage from some of shareholders in this forum.

Researching the fund MGG, although it's relatively new, it has outperformed the benchmark by ~4% which is quite amazing. I've been following the stories from Magellan lately and I found that they're one of the top managers (very respectable in the world of fund management) in Australia too.

Would like to get your thoughts on the fund and UPP in general? From what I read, their DRP is also consistently offering discount which is also funded by the parent company. Well, i think this is quite sensible creating win-win situation: shareholders receive discount, manager absorbs fees but will receive more commissions from the increase in the fund itself.

 

Re MGG I don’t really follow it but was always a bit suspicious about the 4% target distribution yield. This from IIR research report:

https://cuffelinks.com.au/wp-content/uploads/ListedManagedInvestment9-16-2017-12-00-00-AM.pdf

Another research report for some bedtime reading:
https://www.opwm.com.au/sites/default/files/Lonsec_Magellan_Global_Trust_Rec_01.09.17.pdf

 

What’s the interest in SPP? It’s just a tool to raise FUM.

 

Could be the nil brokerage maybe? But its only $20 bucks tho!

 

Thank you sir for all the information.

I really like the Lonsec report, may I kindly know how I could self-generate this in the future? Or it will be great to generate the (another) latest report after the fund (MGG) has gone for almost 2 years now.

Apart from all the points highlighted in those 2 reports, what I found interesting regarding MGG:
1. a lot of positive comments about the manager and fund in general. However, I think it could be better by having a company structure (LIC) rather than trust (LIT) as there are concerns re: sustaining the 4% distribution.
2. My view on the 4% distribution is quite manageable one especially with the manager's track record. Also, the 4% is calculated based on 2-year average NAV which is a long time and this makes it more manageable but of course, it's a trust hence all profit/loss needs to pass through.
3. Albeit the high management fees and with the DRP discount, bonus offering etc. I think this will benefit the followers/shareholders who trust them and as long as the fund will provide the similar/better outcomes to the flagship global fund.

 

Agree, just a small tool in the grand scheme of investment game. But some thinks it's better than nothing?

Some offer like the recent MGG one, it also offers 5% discount to the NAV. So it's more than $20? But yes, like I said above not a big factor. And in comparison to ETF, is this a bonus point to LIC/LIT?