ALF - Australian Leaders Fund

So_Cynical · 29 August 2011

Australian Leaders Fund (ALF) is the new name of Wilson Leaders (WLS). Previous discussion on WLS can be found here: https://www.aussiestockforums.com/forums/showthread.php?t=1702

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ALF is a LIC that operates a little differently from the norm...while they come across as value type stock pickers they also short stocks using a reverse value stock picking criteria probably much better explained by them.
http://www.australianleaders.com.au/aboutalf/investment-process.aspx

Company Summary:

Market Cap: 76 mill.
52-wk High: 1.31
52-wk Low: 1.015
First listed: Feb 04
Gross portfolio increased 28.5% in the 12 months to June 2011
2011 After Tax profit of 14.1 mill up 10.7% year on year
Has Paid 8 consecutive half year FF dividends.
Gross Dividend yield 12%
The fund incurs a management fee of 1% of gross assets.
A 20% fee is applicable if the fund outperforms the All Ords Accumulation Index.

2011 Preliminary financial report can be read here.
http://www.asx.com.au/asxpdf/20110819/pdf/420hp14d610wr2.pdf

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So i opened a new position in ALF today @ 1.19 ~ dividend to come (12% Gross factored forward) and with a bit of a rally its not to hard to see a small profitable exit appearing somewhere down the road.

ALF is a small fund that hasn't captured much support from the investment community and the charts not that flash as far as growth goes, but the dividends have been good over the last 3 years and this market really suits their investment style and should continue to suit going forward...I've watched with interest for 3 years and now ALF is worth a conservative punt for me.

5 year chart and fund performance below.
~

skc · 29 August 2011

So_Cynical said:
Australian Leaders Fund (ALF) is the new name of Wilson Leaders (WLS). Previous discussion on WLS can be found here: https://www.aussiestockforums.com/forums/showthread.php?t=1702

------------------------

ALF is a LIC that operates a little differently from the norm...while they come across as value type stock pickers they also short stocks using a reverse value stock picking criteria probably much better explained by them.
http://www.australianleaders.com.au/aboutalf/investment-process.aspx

Company Summary:

Market Cap: 76 mill.

52-wk High: 1.31

52-wk Low: 1.015

First listed: Feb 04

Gross portfolio increased 28.5% in the 12 months to June 2011

2011 After Tax profit of 14.1 mill up 10.7% year on year

Has Paid 8 consecutive half year FF dividends.

Gross Dividend yield 12%

The fund incurs a management fee of 1% of gross assets.

A 20% fee is applicable if the fund outperforms the All Ords Accumulation Index.

Everything looked OK until the last bullet point! That is a very expensive performance fee. I hope it is only on absolute performance (e.g. if XAOAI loses 15% and ALF loses only 10%, do they still get paid 20% performance fee?)

And what's up with the company doing a SPP AND a share buyback at the same time? They either need more cash or they have too much cash. Are they just arbitraging their own share?

And they were short Minara at end of July... I hope they covered before the takeover.

So_Cynical · 29 August 2011

skc said:
Everything looked OK until the last bullet point! That is a very expensive performance fee. I hope it is only on absolute performance (e.g. if XAOAI loses 15% and ALF loses only 10%, do they still get paid 20% performance fee?)

And what's up with the company doing a SPP AND a share buyback at the same time? They either need more cash or they have too much cash. Are they just arbitraging their own share?

And they were short Minara at end of July... I hope they covered before the takeover.

Yeah im with ya...they did have some bad shorts and bad longs...and the SPP and buyback at the same time seems a little weird to me too, and they do a SPP every year, at the same time of year. :dunno: im just a punter and not a highly paid investment professional like these guys.

skc · 29 August 2011

So_Cynical said:
Yeah im with ya...they did have some bad shorts and bad longs...and the SPP and buyback at the same time seems a little weird to me too, and they do a SPP every year, at the same time of year. :dunno: im just a punter and not a highly paid investment professional like these guys.

The good thing about LIC doing SPP is that they tend to do so at NTA without much discount so no one is diluted. It's just people giving them more money to invest. LIC also do buybacks regularly if the share price is too far below NTA. But doing both at the same time just seems to enrich the brokers...

So_Cynical · 5 April 2012

Seven months after my entry and im slightly in front mostly due to the generous dividend reinvestment plan and not taking an average down when i should of....ALF have issued shares for the last DRP at a price that is less the dividend

and at a 3% discount.

http://www.asx.com.au/asxpdf/20120402/pdf/425d7mrps0wdtz.pdf

I've never struck this before...pretty cool hey, ALF were trading at 1.21 before the x date, then drop 5 cents (the dividend) on the ex date and i get issued shares at 1.12 (with the 3% discount) in the money straight away....a week later and ALF traded at 1.16 today.

Nice.

Reading back over the previous DRP issue announcements this seems to be the first time ALF has done this...hope its not the last.

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1 year chart below showing my 2 buys and 2 div reinvestments...also clearly showing that i should of taken an average down at under 1.07 cos id be laughing now if i did.
~

So_Cynical · 24 May 2012

ALF release quarterly reports to keep investors up to date with how the fund is travelling etc, and as is common now with fund managers they like to sprinkle in a little commentary on how they think the World and Australia is doing, the possible ramifications and opportunities of that analysis and their investment rationale for 4 or 5 of the funds investments.

The latest quarterly report (18 pages) is quite an interesting read...stocks covered are TLS DUE HDF QRN and TCL

http://www.australianleaders.com.au...ns/201204 ALF Quarterly Report April 2012.pdf

So_Cynical · 8 August 2012

So_Cynical said:
ALF release quarterly reports to keep investors up to date with how the fund is travelling etc, and as is common now with fund managers they like to sprinkle in a little commentary on how they think the World and Australia is doing, the possible ramifications and opportunities of that analysis and their investment rationale for 4 or 5 of the funds investments.

The latest quarterly report (18 pages) is quite an interesting read...stocks covered are TLS DUE HDF QRN and TCL

http://www.australianleaders.com.au...ns/201204 ALF Quarterly Report April 2012.pdf

The June quarterly report and commentary was released today...again making for very interesting reading.

http://www.wfunds.com.au/fundreports/ALF_2012_June_Q2_Doc_WEB.pdf

BHP gets a well deserved beating and there is a concise and damming assessment of the world economy and out look...interesting to note the short term performance of the fund with the following 1 and 3 month long and short returns.

Losing money with there longs and shorts. :dunno:

1 MONTH
long -2.0%
short -4.5%

3 MONTHS
long -7.8%
short -12.6%

So_Cynical · 31 August 2012

So_Cynical said:
(29th-August-2011)
So i opened a new position in ALF today @ 1.19 ~ dividend to come (12% Gross factored forward) and with a bit of a rally its not to hard to see a small profitable exit appearing somewhere down the road.

That point "somewhere down the road" was arrived at this week...trade #92 closed with a 6.92% profit at $1.28 CPS, with dividends and credits closer to a 17% return so overall not to shabby.

I think every large (number of stocks) diversified portfolio should include a LIC or 2 or 3 even...as per my LCEAA strategy i have left approximately 35% of my capital in with 100% of my profits as a long term hold and passive income producer...my average holding price is now $1.16

Keen to re-enter at around the $1.08 level...2 year chart below showing all my activity, also showing that you don't have to buy the bottom, sell your losers, dollar cost average, or any of the other crap...just buy good stocks cheap and wait till you can sell em for more than you paid for em.
~

herzy · 1 September 2012

Interesting read SC, and good work on the profitable outcome. Why the second purchase? Looks a little odd...

So_Cynical · 1 September 2012

herzy said:
Interesting read SC, and good work on the profitable outcome. Why the second purchase? Looks a little odd...

Odd yes, its was a very premature average down...from memory i had a little spare cash and need to put it into something and ALF was the chosen something, as my original entry was at the lower end of my typical entry size.

If i have learnt anything over the last 5 years it is that i can tend to be a little ahead of the curve...in to early, as was clearly the case here.

herzy · 1 September 2012

Ah well i think there's more danger in trying to time the market. I spose it looks odder in hindsight too than it would have at the time.

princeplanet · 8 March 2013

Just found this as yet another neglected high yielding stock that should be mentioned more. Big div coming up, I'm thinking of getting in. Anything I should be aware of?

catfish · 8 March 2013

princeplanet said:
Just found this as yet another neglected high yielding stock that should be mentioned more. Big div coming up, I'm thinking of getting in. Anything I should be aware of?

It is trading at a decent premium to NTA, why would anyone pay over book for this? You could easily assemble your own portfolio with the same holdings without management fees and at value, not above.

princeplanet · 8 March 2013

catfish said:
It is trading at a decent premium to NTA, why would anyone pay over book for this? You could easily assemble your own portfolio with the same holdings without management fees and at value, not above.

Maybe, but it would save me a lot of time......

mgm1a · 8 March 2013

catfish said:
It is trading at a decent premium to NTA, why would anyone pay over book for this?

because they know how to make money beyond the level of their assets (NTA)

You could easily assemble your own portfolio with the same holdings without management fees and at value, not above.

- you don't know all the portfolio , it changes often and they SHORT as well as go long - you need staff, time and experience I would suggest to do all that well - ceratinly out of my league

So_Cynical · 8 March 2013

princeplanet said:
Just found this as yet another neglected high yielding stock that should be mentioned more. Big div coming up, I'm thinking of getting in. Anything I should be aware of?

This stock has run very very hard, so you should ALWAYS be aware of the potential to buy a/the top....no biggy if your a trendy and happy to lose 4 or 5% with a stop.

You should also be aware that ALF have and will issue a **** load of new shares over the next 2 months or so..lots of new shares coming onto the market can often lead to price volatility.

Julia · 20 October 2013

SC, are you still holding some of ALF?
Following an article in the Weekend Australian on LICs I've had a look at a few of them. ALF has a pretty attractive grossed up yield.

Boggo · 20 October 2013

Julia said:
SC, are you still holding some of ALF?
Following an article in the Weekend Australian on LICs I've had a look at a few of them. ALF has a pretty attractive grossed up yield.

Holding ALF in my SMSF Julia, paid a divvy last week. It's been doing what it should for a while now.

Judd · 20 October 2013

It does have a high yield.

Merely an observation in that it isn't a plain vanilla LIC as is ARG , MLT, AFI and various other older LICs. It is a Long/Short fund.

As at end September 2013 it has 60.9% of its funds in equities with 175.1% long and 114.1% short.

Also the fund incurs a management fee of 1% of the Gross assets as well as a 20% performance fee if the fund outperfoms the All Ordinaries Accumulation Index. So shareholders are paying 1% on the 39.1% in cash or equivalent (which is passive income I'd really like) and 1% plus performance fee on the Gross 289.2% of FUM which effectively is much higher than a headline of 1%.

Not saying it is no good just be aware of the fees being paid and what they are being paid on.

So_Cynical · 20 October 2013

Julia said:
SC, are you still holding some of ALF?
Following an article in the Weekend Australian on LICs I've had a look at a few of them. ALF has a pretty attractive grossed up yield.

Yes Julia im still holding for long term yield, my average price is $1.16 so sitting on a handsome capital gain of around 50% and pulling a ROIC gross dividend yield of 13.4% ~ i like the long short aspect of the fund and so don't see it as a negative at all especially in a diversified portfolio.

Of course with any fund that operates a little differently (good decision dependant) one should expect some variation in dividend yield, again this variation suits me as i hold a large (many stocks) portfolio and concentrate on entry timing so overall benefit from volatility.

ALF - Australian Leaders Fund

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