Fisher Funds stocks

[Dolcile]

Does anyone know, the returns they quote, are they inclusive of the management fees?

[Basil]

https://kingfish.co.nz/assets/Investor-Centre/Kingfish-Newsletter-June-2024.pdf
Adjusted NAV return is after fees 5.4% average for the last 5 years is not flash but includes more than 4 years of the insipid performance the NZX50 has put in since Covid.  The gross performance is before fees, 7.3%, NZX50 has averaged only 2.2% per annum in the last 5 years.

Today at the annual meeting they said they'd celebrated 20 years in March 2024 and had achieved an average annual return after fees of (and I am going off memory here), 10.3% after fees and beaten the NZX50 which had averaged a fraction over 8% per annum in that time.  Presentation materials from the ASM will be on their website and will have the exact figures.

I had a good chat with Matt Peek the investment manager after the meeting.  I was quite impressed.  He used to work at UBS alongside Julian Cook back in the day. He came across as very knowledgeable about the issues we discussed about several companies in their portfolio and a couple that presently aren't but one they are seriously interested in.    He is not impressed at all with the total fiasco that RYM has been in recent years but is reluctant to reduce their position further.

My sense is the fund is in safe hands under his leadership.  The current discount to NAV at 11% based on closing price today is right towards the high end of the range in recent years and looks like an opportunity to me and is at a higher level of discount than either BRM or MLN at present. 

I think they've done okay on the NZX over the last 5 years considering the appalling state of the N.Z. economy.  I am hopeful that returns will revert towards their long-term average of about 10% per annum going forward and the pressure comes off interest rates.
A good lunch was served as usual, and it was good to catch up with a couple of fellow investors there I knew.
Disc: I bought quite a few more yesterday at $1.21

[Left Field]

Good report, thanks Basil...... FYI NBR's Tim Hunter has an article out today...

https://www.nbr.co.nz/hunters-corner/absolutely-fabulous-fees/

It's behind the paywall but seems he is not impressed.... particularly with the $40 mill in fees.

[winner (n)]

Good report, thanks Basil...... FYI NBR's Tim Hunter has an article on Fisher out today...

https://www.nbr.co.nz/hunters-corner/absolutely-fabulous-fees/

It's behind the paywall but seems he is not impressed.... particularly with the $40 mill in fees.

Leftie. . That article is about Milford

[Basil]

I think he knows that.  Fishers defended their fee structure a while back
https://www.nbr.co.nz/guest-opinion/fisher-funds-right-of-reply/
My view is that as long as their funds are outperforming the relevant index, (I am not particularly keen on arbitrary OCR% + 5% being the benchmark) then they have earned their fees.
Marlin haven't been going well this year.  I have been pretty disappointed and have acted on that, substantially reducing my position in the recent months.

[winner (n)]

Out of curiosity I had a look at Kingfish financial statements for FY24. Quite interesting.

Basically this is what happened over the year -

Sold $74m of investments and bought $53m

Received $7m of divies and interest

So net 'trading activity' was a net income of $28m

Cash expenses were $5m (mainly to Fisher HQ)

Paid out $23m in cash as divies (another $13m paid by DRP) and spent best part of $1m buying their own shares

So that's the Kingfish money go round

And at the end of the  year the investment portfolio was $453m which was the same as the beginning of year ....even though they recorded a change in fair value of $16m

Can't help thinking that The Style Council were very perceptive -

Watch your money-go-round; watch your money-go-round
But I just can't help being cynical
Watch your money-go-round; watch your money-go-round
Do like I say, make me wonderful

[Basil]

Just as a further interesting anecdote, KFL closed at an NTA of $1.464 on Friday v a share price of just $1.26.  This is a 14% discount and about the highest in a decade.  Is such a huge discount warranted or is any discount warranted?
Well, looking at their 5-year performance they have comprehensively beaten the market with a NAV adjusted net return after fees, and keep in mind this is a PIE so no tax is payable on this return, 7.5% per annum net, 9.3% gross before fees compared to the NZX50 index up an average of 2.6%
Kingfish since inception over 20 years ago said at their most recent annual meeting, they have made just over 10% net per annum after fees v just on 8% for the NZX50.  I think they have more than covered their fees and done a satisfactory job or reasonable returns over time.
https://kingfish.co.nz/assets/Investor-Centre/Kingfish-Newsletter-September-2024.pdf

I know the 5-year NZX50 average has been lackluster but 2025 could be a good year with interest rates falling.   I don't think in any way whatsoever is this decade high discount to NTA warranted.  I bought a few more this week as a discounted way to take broad market exposure to the NZX50 for an uplift in 2025.  Next quarterly tax-free dividend from KFL is due before Christmas.  See my recent post in the Barramundi thread, post#438, for the effective annualized gross dividend when you are buying at this level of discount.  Surely an effective yield of 15% gross is highly attractive in a falling interest rate environment!

Marlin on average over the last 5 years have not quite covered their fees and have slightly underperformed. 
https://marlin.co.nz/assets/Investor-Centre/Marlin-Newsletter-September-2024.pdf

[Basil]

Kingfish NTA $1.515 yesterday. 14% discount at $1.31.
I bought quite a few more yesterday.
Got a truckload of BRM already so just spreading my capital around a bit.

[Basil]

https://api.nzx.com/public/announcement/443602/attachment/434018/443602-434018.pdf

Solid performance for November.  Gosh the NZX index in the 12 months to the end of November did okay for a most welcome change, up 15% but Kingfish had a huge outperformance after fees of 26%, that's ~ 11% outperformance for the year and not only that, their track record over 20 years is they have outperformed the NZX after fees by ~ 2%.  Trading at a ~ 10% discount to NTA and with a well proven track record of market outperformance after fund costs, there's a lot to like.  Adds considerable diversification to my NZX holdings too which is a good thing seeing as they're so concentrated.

[Basil]

As noted in posts above I have been hoovering up quite a few Kingfish in recent weeks / months.  Been trading at 12-14% discount to NAV, (currently just on 12%), which is close to a decade high and they have a well proven track record of beating the NZX50.  I think the NZ bourse should do okay next year and see the RBNZ needing to cut hard and fast in 2025, circa 200 bps to stimulate the near dead economy.  I think the closing cash rate this time next year will be circa 2.0%.  NAV at close of trade yesterday after payment of recent divvy of nearly 3 cents on 20 December has bounced back strongly to just over $1.50. ($1.501 by my estimate).  Possibly worth noting that many of the stocks picked by brokers are in the KFL portfolio.

This comment by well known poster Alokdhir on the other channel sums the situation up very well.  I highlighted the especially pertinent point.

6.1 % CEN as per 31/10 ...great inclusion at good time !

Buying KFL today is like buying market at year back prices]

But nothing to worry for holders as we get paid dividend based on NAV and not SP ...and we all are LT holders I reckon ...

[Dolcile]

Basil, I think I've asked this before but I can't find the answer.. how do you find an accurate allocation of the KFL portfolio, to be able to estimate the NTA?
Thanks

[winner (n)]

Basil, I think I've asked this before but I can't find the answer.. how do you find an accurate allocation of the KFL portfolio, to be able to estimate the NTA?
Thanks

Full portfolio published quarterly reports. Keeps track of any major changes in weekly updates.

When you do 20 odd sums that will give a pretty good estimate ...Basil has a trusty abacus

[Ferg]

Basil, I think I've asked this before but I can't find the answer.. how do you find an accurate allocation of the KFL portfolio, to be able to estimate the NTA?
Thanks

Here is the report from September 2024:
https://kingfish.co.nz/assets/Investor-Centre/Kingfish-Newsletter-September-2024.pdf
They have not yet released the December 2024 report.

[Dolcile]

Thanks all

I've just done a quick calculation and put the NAV (@ 3 Jan) at $1.4877. This takes into account the dividend the 20/12/24 dividend.

How does that compare to your calculations ?

[edit: updated the forecast NAV for an calculation input error]

[Basil]

I've got it as $1.4796.  We're not far apart.  BRM is 74.56 by my calculations.