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2 December 2023
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Nick Bolton wants to force Magellan to pay out the 7.5% discount on the Global Fund (ASX:MGF) options. Magellan will resist as it must act in the interests of all unitholders and the cost comes from Magellan itself.
The heyday of LICs is in the past, when issuers paid generous fees to brokers and advisers to put their clients into new structures. Most LICs now trade at a discount and more managers should change the structure.
There were mixed performances by LICs and LITs last year although they generally delivered an increase in dividends. Total returns including price are driven by the extent to which they trade at a discount to NTA.
The dream of many investors is to be able to live off the dividend income from their shares. There is a relatively simple way to do this though it requires a mental fortitude that may not be for everyone.
In Australia and globally, Exchange Traded Funds (ETFs) continue to grow rapidly. A new report suggests investors can expect more products in active ETFs, alternative strategies, cryptocurrency and ESG.
LIC discounts can be a pain for existing investors but an opportunity for new buyers. To avoid further losses from discount widening or buy/sell spreads, hold for the long term and enjoy the increased income flow.
The majority of Listed Investment Companies trade at a discount to the value of their underlying assets, which may be good for buyers but annoying for sellers. Managers struggle to remove the discount, as explained on ASX:MGF.
Smart beta funds are based on predetermined factors or investment methodologies, not stock selections by fund managers. The funds are transparent and rules-based, usually at a cheaper cost than active managers.
Treasury has conducted a post-implementation review of the banning of stamping fees paid by product issuers to brokers and advisers. The Australian Shareholders' Association does not support the banning.
Both passive investing and ETFs have withstood criticism as their popularity has grown. They have been blamed for causing bubbles, distorting the market, and concentrating share ownership. Are any of these criticisms valid?
Discounts on LICs and LITs vary with market conditions, and many prominent managers have seen the value of their assets fall as well as discount widen. There may be opportunities for gains if discounts narrow.
Buy and sell price spreads on ETFs vary significantly, and some funds come with high spreads which add to transaction costs which most investors overlook. There are particular ETFs where the costs are highest.
A new report suggests that Australians are ill prepared for the largest intergenerational wealth handover in history. It's estimated $3.5 trillion in assets will be transferred from Baby Boomers to their children by 2050.
Many people in the Firstlinks community have been reading my articles and editorials for 10 years or more, and worked with me for decades before that, and deserve an explanation for why I have suddenly stopped writing each week.
The rules to age successfully include, 'the unexamined life lasts longer', 'change no more than one-eighth of your life at a time', 'nobody is thinking about you', and 'pursue virtue but don’t sweat it'.
The ASX 200 is around the same price that it was 16 years ago. The poor long-term performance can be largely blamed on our taxation system, which encourages companies to pay out most of their earnings as dividends.
John Bogle famously advocated a two-fund portfolio of US stocks and bonds. Recently, I tried to create an Australian version of the Bogle portfolio and found that what seems simple can quickly turn complicated.
Money withdrawn from super after age 60 is tax-free but less understood are arrangements that allows a couple over the age of 67 to earn up to $57,948 per year outside super and pay no tax with LITO and SAPTO.