Closed-End Funds

Closed-End Funds

Postby tangoandrew » Fri Jul 04, 2008 11:53 pm

Would like to hear from you guys regarding this closed-end fund listed in klse, ICAPITAL. Actually stumbled across a write-up in the Msia STAR on its FM, Tan Teng Boo, who apparently appears on Bloomberg & CNBC. He also runs a global fund for AIs.

Some key stats & ratios from google finance - http://finance.google.com/finance?q=KUL:ICAP

Quarterly Annual Annual
(May '08) (2008) (TTM)
Net Profit Margin 45.98% 85.55% 85.55%
Operating Margin 65.58% 90.04% 90.04%
EBITD Margin - - -
Return on Average Assets 3.53% 22.42% 22.42%
Return on Average Equity 3.56% 22.61% 22.61%

Its latest NAV = RM1.74 - http://www.icapital.biz/english/ & last traded at RM1.80 - http://www.klse.com.my/website/bm/marke ... ion/prices

My view: This fund is a good option for pple who cannot actively monitor klse mkt but wants to profit from it. Have been monitoring this fund some time...the current spread has dropped significantly as it went as high as 19% some mths back.

Not sure what are the cons, though.
tangoandrew
Loafer
 
Posts: 21
Joined: Fri Jun 20, 2008 11:46 pm

Re: Closed-End Funds

Postby winston » Sat Jul 05, 2008 7:48 am

Hi tangoandrew,

I do not know this fund and I was quite surprised to see it trading at a slight premium. Most of the close-end country funds that I used to follow in the US, normally trades at a discount, sometimes at huge discount.

I've not invested in Malaysia since the Clob saga and I do not have any intention to put any money there, in view of their of their current political situation. Their unstable political situation may also last a few more years. Malaysia now is just like Taiwan under the DPP :(

Will keep this fund in mind when I revisit Malaysia in two years time.

Thanks and take care,
Winston
It's all about "how much you made when you were right" & "how little you lost when you were wrong"
User avatar
winston
Billionaire Boss
 
Posts: 118539
Joined: Wed May 07, 2008 9:28 am

Re: Closed-End Funds

Postby kennynah » Sat Jul 05, 2008 9:32 am

Pls correct me if i am wrong here....i understand that one primary difference between closed-end-funds and Exchange Traded Funds (ETFs) is that the former's price is not traded openly in exchanges? as such, the price is determined only at the end of each trading day. Hence, if i own a CEF and i wish to sell, this order will not be executed immediately but at the end of the next trading day. And since, i cannot predetermine what the bid/ask price will be in advance, i have little choice but to enter a "Market Order" if i am to be certain that it will be executed. This can pose as a disadvantage.
Options Strategies & Discussions .(Trading Discipline : The Science of Constantly Acting on Knowledge Consistently - kennynah).Investment Strategies & Ideas

Image..................................................................<A fool gives full vent to his anger, but a wise man keeps himself under control-Proverbs 29:11>.................................................................Image
User avatar
kennynah
Lord of the Lew Lian
 
Posts: 16005
Joined: Wed May 07, 2008 2:00 am
Location: everywhere.. and nowhere..

Re: Closed-End Funds

Postby winston » Sat Jul 05, 2008 9:46 am

Hi k,

Closed End Funds are like ETFs. They are traded like shares. However, it could be trading at a premium or discount to the NAV.

Open End Funds are the Mutual Funds that you buy thru the banks. You do not know the price that you will be getting until the next day.

Take care,
Winston
It's all about "how much you made when you were right" & "how little you lost when you were wrong"
User avatar
winston
Billionaire Boss
 
Posts: 118539
Joined: Wed May 07, 2008 9:28 am

Re: Closed-End Funds

Postby kennynah » Sat Jul 05, 2008 10:05 am

ok W...thanks for clarifying...you;ve corrected my misconception...thanks.
Options Strategies & Discussions .(Trading Discipline : The Science of Constantly Acting on Knowledge Consistently - kennynah).Investment Strategies & Ideas

Image..................................................................<A fool gives full vent to his anger, but a wise man keeps himself under control-Proverbs 29:11>.................................................................Image
User avatar
kennynah
Lord of the Lew Lian
 
Posts: 16005
Joined: Wed May 07, 2008 2:00 am
Location: everywhere.. and nowhere..

Re: Closed-End Funds

Postby tangoandrew » Sat Jul 05, 2008 10:19 am

right....CEFs are traded like shares...

not vested but this CEF looks safest to invest.

looks more attractive now that the premium is down from 19% to abt 3% but have to agree with winston that current situation in Msia may be a big long drag...

btw, interesting write-up by a blogger on this CEF - http://www.ahyap.com/blog/icap.php
tangoandrew
Loafer
 
Posts: 21
Joined: Fri Jun 20, 2008 11:46 pm

Re: Closed-End Funds

Postby kennynah » Sat Jul 05, 2008 10:23 am

and since we are on this topic, perhaps it can be articulated here, if u are inclined, the primary differences between CEFs and ETFs
thanks.
Options Strategies & Discussions .(Trading Discipline : The Science of Constantly Acting on Knowledge Consistently - kennynah).Investment Strategies & Ideas

Image..................................................................<A fool gives full vent to his anger, but a wise man keeps himself under control-Proverbs 29:11>.................................................................Image
User avatar
kennynah
Lord of the Lew Lian
 
Posts: 16005
Joined: Wed May 07, 2008 2:00 am
Location: everywhere.. and nowhere..

Re: Closed-End Funds

Postby winston » Sat Jul 05, 2008 10:30 am

I dont think there is any difference. tangoandrew, please correct me if I am wrong..

Just like no difference between "Huatopedia" and "Fattopedia".. :P
It's all about "how much you made when you were right" & "how little you lost when you were wrong"
User avatar
winston
Billionaire Boss
 
Posts: 118539
Joined: Wed May 07, 2008 9:28 am

Re: Closed-End Funds

Postby kennynah » Sat Jul 05, 2008 10:32 am

w : i am quite certain that there are differences between CEFs and ETFs...
Options Strategies & Discussions .(Trading Discipline : The Science of Constantly Acting on Knowledge Consistently - kennynah).Investment Strategies & Ideas

Image..................................................................<A fool gives full vent to his anger, but a wise man keeps himself under control-Proverbs 29:11>.................................................................Image
User avatar
kennynah
Lord of the Lew Lian
 
Posts: 16005
Joined: Wed May 07, 2008 2:00 am
Location: everywhere.. and nowhere..

Re: Closed-End Funds

Postby kennynah » Sat Jul 05, 2008 10:42 am

ok....might as well i do the walking here....

A closed-end(ed) fund is a collective investment scheme with a limited number of shares.

In the U.S. legally they are called closed-end companies and form one of three SEC recognized types of investment company along with mutual funds and unit investment trusts. Other examples of closed-ended funds are Investment trusts in the UK and Listed investment companies in Australia.

New shares are rarely issued after the fund is launched; shares are not normally redeemable for cash or securities until the fund liquidates. Typically an investor can acquire shares in a closed-end fund by buying shares on a secondary market from a broker, market maker, or other investor -- as opposed to an open-end fund where all transactions eventually involve the fund company creating new shares on the fly (in exchange for either cash or securities) or redeeming shares (for cash or securities).

The price of a share in a closed-end fund is determined partially by the value of the investments in the fund, and partially by the premium (or discount) placed on it by the market. The total value of all the securities in the fund divided by the number of shares in the fund is called the net asset value, often abbreviated NAV. The market price of a fund share is often higher or lower than the NAV: when the fund's share price is higher than NAV it is said to be selling at a premium; when it is lower, at a discount to the NAV.
Options Strategies & Discussions .(Trading Discipline : The Science of Constantly Acting on Knowledge Consistently - kennynah).Investment Strategies & Ideas

Image..................................................................<A fool gives full vent to his anger, but a wise man keeps himself under control-Proverbs 29:11>.................................................................Image
User avatar
kennynah
Lord of the Lew Lian
 
Posts: 16005
Joined: Wed May 07, 2008 2:00 am
Location: everywhere.. and nowhere..

Next

Return to Other Investment Instruments & Ideas

Who is online

Users browsing this forum: No registered users and 15 guests

cron