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Investing for Yield
nipper
post Posted: Oct 20 2019, 08:27 AM
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In Reply To: mullokintyre's post @ Oct 19 2019, 10:17 PM

Mick, the former (Ponzi) isn't necessarily the case, but you are absolutely correct in the latter observation.

My observation is the suppliers of product into the market are wonderfully elastic in manufacturing these funds, especially when demand is strong. The biggest risk in collections of assets is the ability to hide the mutton amongst the lamb (which i think was a signal feature of a recent GFC ?)



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"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne
 
mullokintyre
post Posted: Oct 19 2019, 10:17 PM
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In Reply To: nipper's post @ Oct 19 2019, 02:36 PM

I presume allthe mums and dads understand the meaning of a ponzi scheme and the old addage that with increased return comes increased risk, not necessarily in equal portions.
Mick



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sent from my Olivetti Typewriter.
 
nipper
post Posted: Oct 19 2019, 02:36 PM
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QUOTE
...say hello to the recently upgraded and accelerated float of the Kohlberg Kravis Roberts-managed Credit Income Fund which is seeking to raise $925m and due to list on November 21. By Friday it had closed with early reports it has been fully subscribed.

In many ways this unlikely switch captures a much wider theme that is a genuine milestone for our local market. The hunt for yield has ordinary investors fanning out across the market willing to invest well beyond ordinary shares in the hunt for income. As policymakers and financial advisers in turn become convinced that cash rates are going to be very low for a very long time, it turns out mum and dad are now being led into the uncharted waters of credit markets, private equity and a string of related “alternatives”.


The KKR fund is quite literally a monster: To open your doors for the first time in this way to the public and ask for $750m and then to bump that figure up to $925m and to get it without fuss, or indeed any of the dramas still circling the thwarted float of Latitude, is extraordinary.
But here’s the thing, the fund is offering 4 to 6 per cent per annum.

The fund “aims to provide Australian investors with attractive risk-adjusted returns and access to a diversified portfolio of income generating alternative credit assets through the trusts investment funds managed by KKR’s credit investment teams”.


QUOTE
[KKR is] selling alternative credit investments to Australian retail investors. Those involved ...are the very same operators we traditionally associate with companies selling shares namely, Bell Potter, Wilsons, Patersons, Shaw, Evans Dixon and many more.

The Credit Income Fund will invest in loans, bonds, notes and other debt securities and it comes in the form of a listed investment company.

..... The KKR credit fund and its substantial retail component did not appear out of the blue. Indeed the market has already been well tested in recent times through a string of precedents. Earlier this year the Partners Group Global Income Fund raised $550m and the Metrics Income Opportunities Fund raised $300m. And there are more coming, the global bond kings Pimco are reportedly planning an Australian fund as well.

How deep is the demand? Well, how much investment money is sitting in cash accounts earning nothing?

Each week I do a podcast with Alan Kohler. It’s called The Money Cafe. In the show we take questions from listeners, every week this issue comes up … where can I get a better return than 1-2 per cent in bank deposits?
James Kirby



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"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne
 
nipper
post Posted: Sep 12 2019, 11:05 AM
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QUOTE
The local exchange-traded fund sector has received an unexpected reversal with leading player BetaShares forced to defend its management style after its $160m Dividend Harvester Fund failed to achieve an “investable” rating.

Aimed at investors seeking regular income, the Dividend Harvester fund — which is technically a managed fund rather than an ETF — has been the subject of a harshly critical report from the Lonsec rating group. Lonsec has criticised the “capital erosion” suffered by the product. It has also taken issue with the concentrated nature of the fund and its fee structure.

As the ratings group explains: “We positively view the manager’s effort to build out the investment process three times since the product inception — but it has yet to fully generate desirable outcomes for investors and therefore the current features of the product are considered in­sufficient to warrant an investable rating.”

The Dividend Harvester is a “rules-based” fund reflecting a newer trend among index and ETF managers to create funds that are based on rules or active guidelines rather than traditional index funds that simply mirrored existing indices such as the ASX 200 or the S&P 500.

The return of the Dividend Harvester fund over the past three years is modest at 4.18 per cent a year, as strong income was achieved but underlying share prices of stocks in the fund declined. The total return of a standard Australian share fund should be about 8 per cent a year over the past decade.

- always wondered how they'd do it.. ends up they couldn't .. "too hard basket" (of shares)



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"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne
 
mailhep
post Posted: Mar 11 2005, 08:43 AM
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Hey Norm,

Thanks for your response re. ADZ.....

I guess they've got a way to go to meet your Yield criteria....my hope is that they get back to a cash EPS of around 15c with an 80% payout ratio....latest half suggests they are on track for the first bit and the second we'll wait and see.....the only problem I see with your criteria is that by the time they achieve this for 2 or 3 halves the price is bid up and the yield falls away to the market....so you are always either punting on a recovery or growth..ie. taking on risk......anyway I'll check in with you again on this one....tell your manager friend to keep working hard!!

cheers

 
toilet
post Posted: Mar 9 2005, 06:36 PM
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i believe ADG (Adtrans) and GLI (GoldLink IncomePLus)
SHOULD fit the yield model suggested.

the SMS one probably a bit inapporpriate
as returns shouldn't be as consistent (resouce boom making the difference)

 

sentifi.com

Share Cafe Sentifi Top themes and market attention on:


toilet
post Posted: Mar 9 2005, 06:06 PM
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SIMS GROUP LTD [SMS]

PRINCIPAL ACTIVITY
SIMS Group Limited (SMS, formerly Simsmetal Ltd) is involved in ferrous and
non-ferrous metal recycling and the processing of metals and plastics. The
company has operations in Australia, North America, Asia and Europe.

divisions
SIMS METALS , SIMS MANUFACTURING/ALUMINIUM, SIMS ENERGY, SIMS INTERNATIONAL, SIMS STEEL, SIMS PLASTICS & SIMS INDUSTRIALS.

CURRENT YIELD 5.7%

DIVIDENDS
04 86CENTS (55%FRANKED) EPS 129.8CENTS
03 54CENTS (75%FRANKED)
02 36CENTS (100%FRANKED)
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FORECAST
05 137CENTS (50%FRANKED) EPS 211CENTS (70cents delcared ex div 18th MARCH)

 
normc
post Posted: Mar 9 2005, 03:32 PM
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In reply to: mailhep on Wednesday 09/03/05 02:55pm

Sorry mailhep, I accidently posted my response on the ADZ thread after reading your post there. Here it is on the correct thread:

Sorry to disappoint, mailhep, but they don't pass my sniff test as a yield stock. Possibly a turn around stock, if current improvements can continue, but not yield.
EPS has been in steady decline since '99 when it was 19.5c. Since then it has been 17,15.9,14.5,9.5,6.6. First half this year is 4.8, which suggests a small turn around, but several halves of improvement to go to be considered a reliable performer.
No dividend paid in 03. Yield stocks must be reliable.
My calculation of 05 yield would give no better than 3% on current price. 2.4c interim, say 2.8c final (my estimate; Commsec suggests 4.7c for full year).
I don't follow ADZ these days. Traded them for small (but not spectacular) profits a few times during '03 and '04, but steer clear these days.
I know one of the Divisional GM's at Adsteam pretty well. I have no inside info, but I do know they are putting a lot of effort into improvement strategies. Despite this, they don't fill me with enough confidence to put my money in at the expense of other opportunities at the moment.

In short, they are not a yield stock. If you have confidence in their business improvement strategies, they may give good returns as a turn around stock. My opinion only. I've been known to be wrong at times.


 
mailhep
post Posted: Mar 9 2005, 02:55 PM
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Hey Norm,
Have a look at Adsteam ADZ who I believe fit your criteria nicely. They have run up a bit lately but overall yield still looking solid and some nice upside potential, see my post under ADZ. Interested in your thoughts should you wish to run your own ruler over them....

 
normc
post Posted: Mar 9 2005, 01:40 PM
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Although it doesn't meet my normal criteria for yield investments, I've recently bought into HDF (Hastings Diversified Utilities Fund). Listed in Dec 04 with issue price of $2.56. Managed by Westpac subsidiary, Hastings Funds Management. As the name suggests, invests in Utilities in Australia and overseas (OECD countries). Forecast distribution for year to Dec 05 is 24.38 cents. This is a yield of 9.4%, a significant part of which should be tax deferred. Current share price is $2.58.

DYOR, but this looks pretty good for anyone looking for reliable income, with potential capital gains as well. I've put it in the SMSF and plan a long term hold.

 
 


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