Harvesting discounts from LICs and other stocks - Daryl Wilson
Updated: November 19, 2024
Summary
The video discusses the strategy of harvesting discounts from LICs to enhance investor returns. Affin Funds Management, founded in 2015, offers funds targeting better-than-average returns over three years and regular income of at least 5% per annum. Daryl Wilson emphasizes the importance of discount capture in adding value to investment portfolios through timely buying and selling of LICs at opportune times. He provides examples and case studies to illustrate how this strategy can capitalize on market discounts, in turn, benefiting investors in volatile markets. Overall, the presentation sheds light on identifying investment opportunities in LICs, REITs, and other infrastructure funds by leveraging discount capture strategies.
TABLE OF CONTENTS
Introduction to Affin Funds Management
Key Aspects of Affluence Funds
Background on Discount Harvesting
Examples of Listed Investment Companies (LICs)
Utilizing Discounts for Additional Returns
Opportunities in the LIC Space
Current Market Conditions and Investment Strategies
Case Studies and Investment Analysis
Introduction to Affin Funds Management
Daryl Wilson, CEO and portfolio manager at affin funds management, founded affin in 2015. He has over 25 years of experience in funds management, investment operations, and capital raising. The presentation topic is about harvesting discounts from LICs.
Key Aspects of Affluence Funds
Affin offers four funds targeting better than average returns over three years, regular income of at least 5% per annum, and aims to smooth returns in volatile markets. The presentation highlights the common characteristics of their funds.
Background on Discount Harvesting
Daryl discusses discount capture as a strategy focusing on buying LICs at a discount and selling them when the price increases. He explains how this strategy adds value to investor returns by capitalizing on market discounts.
Examples of Listed Investment Companies (LICs)
Daryl provides an example of LICs, explaining how these companies can trade at a discount or premium to their asset value based on market sentiment. He illustrates this point using AIC epic as a case study.
Utilizing Discounts for Additional Returns
The strategy of capturing discounts can work in favor of investors by enhancing returns through buying and selling LICs at opportune times. Daryl emphasizes the importance of discount capture in adding value to investment portfolios.
Opportunities in the LIC Space
Daryl elaborates on finding opportunities in the LIC space, REITs, and other infrastructure funds. He mentions the criteria for identifying investment opportunities, such as asset valuation, special situations, and corporate restructures.
Current Market Conditions and Investment Strategies
Daryl discusses the current market conditions, highlighting the benefits of discount capture in the current environment. He explains the potential upside of investing in various LICs and REITs with attractive discounts.
Case Studies and Investment Analysis
Daryl presents case studies of LICs and REITs, including RIDEA Capital, CD1, CD2, CD3, and GDI, to illustrate the potential returns from discount capture strategies. He analyzes the market dynamics and investment opportunities in each case.
FAQ
Q: What is the strategy of harvesting discounts from LICs?
A: Harvesting discounts from LICs involves buying them at a discount to their actual asset value and selling them when the price increases, thereby adding value to investor returns.
Q: How does the strategy of discount capture benefit investment portfolios?
A: The strategy of discount capture enhances returns by taking advantage of market discounts and opportune times to buy and sell LICs.
Q: What are the criteria mentioned for identifying investment opportunities in the presentation?
A: The criteria include asset valuation, special situations, and corporate restructures in the LIC space, REITs, and other infrastructure funds.
Q: What is the importance of discount capture in the current market environment?
A: In the current market conditions, discount capture presents opportunities to invest in LICs and REITs at attractive discounts, potentially leading to significant upside.
Q: Can you explain the potential returns from the discount capture strategy using case studies?
A: Case studies like RIDEA Capital, CD1, CD2, CD3, and GDI are presented to illustrate how implementing discount capture strategies can result in substantial returns by analyzing market dynamics and investment opportunities.
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