Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
Thank you for your comments, Guitarsolo. As we know, the currency hedging is in place to ensure that asset sales in USD can be converted to Euros at a known exchange rate, which can give a degree of certainty as to the Euro value of any disposals. Princess reports its income in Euros.
However, as Partners Group will know, currency hedging for future assets sales doesn't work if there are no assets sales! All that is left is a currency contract with a positive or negative value, totally dependent on the vagaries of currency markets. To my mind this is unforgivable. They knew that private equity deal activity was slowing down some time ago. They are paid to manage such risks or at least advise investors of any possible future risks, and I see no evidence of this in the annual and interim reports.
This could be just the beginning of the value destruction, as the announcement today does not give any detail on how much currency in total has been hedged, and the maturity date/s on the contract/s. If the currency contracts are huge, and margin calls cannot be fulfilled, the forex counterparties will become unobliging creditors to Princess, and it could be "goodbye and goodnight". Similar happened to Alpha Pyrenees Property Trust, where the (mis)managers wiped out the business with big forex bets that went against them.
Make no mistake, we are in the danger zone here.
Ultimately the board has approved currency hedging to gamble with other people's money, in the hope of making effortless returns. There was no need to hedge currency because of the geographical spread of the underlying companies. 36.4% of the value is in Europe and 50.9% in North America, so the "hedge" was already a natural part of the portfolio. Why take the risk?
The dollar has appreciated significantly against the Euro, and it looks like currency forward contracts have come to the end of their term, meaning real and serious losses. It's difficult to tell without more detail on the currency exposure and the nature of the contracts. They have been very good at keeping it out of focus, and I didn't see much about it in the annual report either.
All in all, pretty disgusted. And, of course, they take their fees whatever happens to us. They win, we lose.
sdfs
Has anyone looked at DEMD (or DEM if you prefer GBP listing)? The Wisdomtree fund has a comparable yield with a focus on quality and ESG factors. It's also a large cap play, whereas this one is a mid-cap tilt.
Tempted to put some in to this ETF, which is a large cap emerging market dividend play. Wisdomtree's "quality factors" have perhaps played a part in the increasing dividends over time, and the ESG tilt means the fund avoids more of the "old economy" stocks . The yield is very tempting; not without more risk, but still tempting.
Yes, we'll have to wait to see what the true impact the russian haircut has had on the income. But, nevertheless, I will continue to buy more at these levels. Happy to keep on with the pound-cost-averaging to secure myself a decent income when I retire in 20 years. Naturally, this ETF is a small part of a wider portfolio of funds.
Tacly, what was the haircut to this fund from the Russion investments. Might you know? I had it as 20%
TOD, that's right, the weak pound should be bolstering the price of SEDY, yet at current levels it is lower than the lowest low of the pandemic. In fact, this is an all-time low, except for the emeraging market crash in 2016. This is bargain territory and I will simply buy more.
Solid performance in these uncertain times. Keep up the good work, Brucey Baby
Share price holding up very well in these uncertain times. Solid stuff.
Agreed. Thomas Moore may be a good manager in these new times where dividends matter, and I like the way he isn't willing to get sucked in to the ESG noise. It also appears that the chairman and directors do a good job of holding him to account.
This has been a good dividend payer over the years, with distributions trending up over time. How can the price be so low?? I think the yield at the moment would be circa 8%. I'm annoyed at the capital loss, but there's only one thng for it - buy more.
Good uplift in nav today. Good set of numbers except the voids.
In my view (and experience as a shareholder) this REIT has been a value destruction project, overseen by a board who have decided to sell out at a discount rather than take responsibility and move the company forward. An utter disgrace, in my opinion. The executives have abused the fact they had nothing to lose and placed no value on the trust given to them by the company's owners. Yet they were compensated generously.
I bought in here about 7 years ago, and it's been an underwhelming investment. But it may have it's day, so I'll continue to hold it alongside my HFEL investment. As an income investor I hope to have a better time of things in the next decade.
I would never invest in an IT that charges a performance fee, and in this respect I am disappointed in Janus Henderson with regards to this trust. It really leaves a bad taste in the mouth.
A decent rise in the share price since the covid slump. This is well managed REIT with prudent gearing. I'll continue to hold.
There is no dilution when an investment trust issues new shares at premium to NAV because they use the money to buy more of the underlying holdings. If those holdings cost less than the value of shares sold, it is to the benefit of existing shareholders. My view - don't worry about it.
I've held this for a long time, buying in at 80p a good while ago. I checked in on the price in late 2020 - shocked to see it at 45p. So I bought some more, hoping the high leverage would see the price rise in a recovery. It's now at 80p with a NAV of circa 90p. Things can change in a short period of time - I'm glad I held my nerve.
I got in at £7.15. Bargain, but I'm watching the pay awards to the CEO and CFO very closely. Significant increases in recent years.