Re: Octaviar MFS Premium Income Fund PIF
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$1 by Sept2011/Sept2013 is $1.11/$1.19 indexed (compounded - once per year) at 3.5% inflation.
Per annum the fund would need to achieve to make the target in 3/5yrs:
35%/21% (45c valuation)
30%/19% (50c valuation)
26%/17% (55c valuation)
23%/15% (60c valuation)
19%/13% (65c valuation)
Shall have a go at calcs including qly capital returns.
Without inflation the figures are 30%/17%; 26%/15%; 22%/13%; 19%/11% & 15%/9%
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3c by Dec and then quarterly capital return (distribution) of 1.5c would return in 3/5yrs 20.5c/34.4c (indexed at 3.5%pa. Or 19.5c/31.5c without adding inflation) Hence, WC would need to simultaneously grow the fund to 90.3c/84.4c (80.5c/68.5c without inflation) to achieve the Sept2011/Sept2013 values of $1.11/$1.19.
With these $ leaving PIF and assuming all 755M units staying in PIF and no new capital; the fund would need to generate the following average quarterly return on investments (AFTER subtracting running costs) (3yr / 5yr)
8.7% / 5.9% (45c valuation)
7.6% / 5.2% (50c valuation)
6.6% / 4.5% (55c valuation)
5.7% / 4.0% (60c valuation)
4.9% / 3.4% (65c valuation)
i.e the equivalent of annual RoI of (e.g. 3.44%*3.44%*3.44%*3.44%=14.5%):
39% / 26% (45c valuation)
34% / 22% (50c valuation)
29% / 19% (55c valuation)
25% / 17% (60c valuation)
21% / 15% (65c valuation)
Ignoring the erosion effect of inflation the quarterly returns would be:
7.8% / 5.1% (45c valuation)
6.7% / 4.3% (50c valuation)
5.7% / 3.7% (55c valuation)
4.8% / 3.1% (60c valuation)
4.0% / 2.6% (65c valuation)
i.e the equivalent of annual returns of:
35% / 22% (45c valuation)
29% / 18% (50c valuation)
25% / 16% (55c valuation)
21% / 13% (60c valuation)
17% / 11% (65c valuation)
Is this about right?
If so, then Michael King has done a lotta damage for WC to try and catchup.