Rare Discount Capture Opportunity
Future Generation Global Investment Company Limited (FGG) is a LIC that invests in internationally-focused fund managers across a diversified spread of three broad equity strategies: long equities, absolute bias, quantitative strategies, and cash. In place of a management fee, FGG pays an annual investment to select charities equal to 1.0% of the net tangible asset (NTA) value. With investments across 12 different fund managers at the end of May 2020, FGG is less exposed to the specific active investment management risks of investment performance and strategy risks, key personnel losses, and concentration risks. FGG’s exposure to multiple fund managers and cash (11.5% of gross assets at the end of May) would be expected to provide returns similar to the MSCI AC World Net Return Index (A$) less the annual charitable donation and expenses, and the underlying portfolio has done just that. Despite this, the share price has traded at an average discount wider than 20% this calendar year.
NBI reduces target return from 5.25% to 4.50%
NBI Global Corporate Income Trust (NBI) has announced an FY21 target distribution of 4.50% p.a. (net of fees and expenses), which equates to 0.696 cents per Unit paid monthly. This is a decrease of 75bps from the 5.25% p.a. target since listing.
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