|M&g High Income Inv Tst
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M&G High Income Share Discussion Threads
Showing 201 to 224 of 225 messages
|WOW a 2.7p rise in NAV between noon yesterday and noon today, the bond portfolio must have benefited from the rate rise as it's unlikely to be due entirely to the equity portfolio.|
|timbo, I agree, given the spread on the shares there doesn't seem that much point in selling before windup.|
I don't have significant capita gains on these income shares, so I'll take the cash and consider reinvesting in the secondary market (at a discount to NAV) rather than take the roll over and invest at the underlying NAV
I definitely won't sell before wind up as I would then no longer qualify for the likely final post wind up payment which should include a significant VAT rebate payment.|
|Cheers tim. It would be helpful if they had actually set a date for announcing what they intend to offer.|
|....a couple of other noteworthy items from the results:
* They have already made £350m provision for winding up cost (see note 5) so the current NAV reflects these likely costs already.
* There could be a post-windup payment for reclaimed VAT on management fees, I'm not sure over what period this would apply, but last year fees were £3.7m (note 4) so 20% of that is circa 700K and if the rebate were over a 10 year period that could be as much a £7m (i.e. 2.7p/share).
* The decrease in interest rates announced yesterday will have increased NAV of the bond portfolio, the Annual report states that this would be circa £4M for a 0.5% reduction (see note 16) so presumably it would be approaching £2m for a 0.25% reduction in interest rates (i.e. 0.8p/share)?|
|The commentary on the winding up process from the results released earlier this week are fairly self-explanatory:
The Board is mindful of the fact that the Company is approaching the end of its planned life and is due to be wound up on 17 March 2017 and for cash to be returned to shareholders. The Board believes that it would be beneficial to shareholders as a whole, for the Manager to have some flexibility around the Company's permitted exposure to convertible and fixed interest securities, so as to help position the Company's portfolio ahead of the Company's winding-up in March 2017. It has therefore agreed that the Manager may invest up to 40% of the portfolio in such assets, representing a non-material increase to the permitted limit of 30% in the current investment policy. We expect to continue reducing the equity content gradually over the next few months following the strong rally in the stock market after the Referendum. We also retain the option of protecting the capital value of the portfolio through the use of derivatives at the appropriate time.
The Board is aware that a number of shareholders will have latent capital gains within their holding, and so we are considering potential investment options for shareholders in addition to the cash return. While the exact nature of the options to be made available to shareholders are yet to be determined, the Board intends to offer shareholders at least one roll-over option, which will allow a tax efficient roll-over into a new investment. The Board and its advisers expect to consider a range of different roll-over options, including both open-ended and closed-ended investment companies.|
|I agree with your comments erstwhile|
|Final results are due imminently and I'd expect an indication then. With £430m of assets they will be heavily motivated to provide a rollover option to retain assets. I'd expect a two class structure (new zdps and geared ordinary shares) but this may be thwarted by the fact that zdp owners may want a higher yield than structurally acceptable in the current environment.
Any rollover will be required to offer a NAV minus costs exit for all three share classes.
The windup date is actually 17 Mar 2017
The income shares (in fact the units MGHU more so) are very cheap presently particularly if you can buy them well inside the offer. This cheapness is after allowing for the remaining accretion on the zdps and management fees, so I like them a lot.|
|I think the trust will announce plans by February 2017,if memory serves me right
Kind regards, Steve|
|Does anyone know what the timetable is for the windup of the trust? When are we likely to be asked whether we want to roll over or take cash?|
Your analysis is correct.
If the shares were wound up today (with no fees incurred) and the Zeros were paid out in full today, then the income shares would receive the current NAV for the units (MGHU) minus the final redemption value of the zeros (MGHZ)
i.e. 169.15p - 122.83p = 46.32p
I hold a few income shares (MGHI) which currently trade at at around today's wind up value (i.e. a 0% discount), however they still offer good value as you get some decent gearing for nil premium and there are still a few good dividends to come (which should be covered by revenue coming in as dividends from the investment portfolio).|
|Erstwhile - not saying you are wrong but the current ord NAV is based on the Zdps being valued at c 113p whereas they will be repaid for more than that ( c123p?) Every extra penny on the Zdps repayment price is a penny off the ord NAV|
|There's around a dozen still out there I think. What got them tainted was all the cross shareholdings in 2003, but that all was forced to be cleaned up.|
|Do zeros exist any more though? I thought they were tainted and had been abandoned?|
|There will absolutely be a rollover vehicle, this portfolio is £425m of assets that M&G won't just "let go". I'd expect a 2 share class structure (new zeros and ordinaries) so as to maintain some decent gearing on the ordinary shares. However part of that rollover will have to allow a NAV exit for those that don't want to roll, as per the original conditions of the investment trust.
These are on a 16% discount (NAV of 56.25 and trades today at 47.5), so you can get out on a ~0% discount in 11 months, plus probably 6.8p of dividends while you wait, with the first one going ex-dividend this thursday 28th. What's not to like.|
|3 trading days of the tax-year left. CGT and dividend tax changes next year so some might want to make porfolio changes this year. It's less than a year to wind up of MGHI and there are no proposals for a roll-over vehicle yet. Some investors might have wanted to sell in the current tax-year if they knew what the new proposals are, but it is nearly too late. Not a very good show.|
|nice dividend paid into my account today ;)|
|Presumably it will be put to some kind of a vote.
I've noticed that fixed income investments are now appearing in the top 10 holdings (Gilt '17 index linked etc.) - I wonder if they are just switching out given current volatility, or whether this is a gradual switch to fixed income between now and March 17 to reduce overall downside risk.|
|Is the wind up of this trust definite then?|
|M&G High Income Investment Trust's board has resolved to declare a second interim dividend of 1.60p, an increase of 6.7% (2014: 1.50p) per income share, for the three months to 30 November. The dividend will be paid on 25 February to income shareholders on the register at the close of business on 29 January. The ex-dividend date will be 28 January 2016.|
|20th Jan is declaration day. Ex-div will be on 28th.|
|Ex Dividend on 20th I think. Will we see buying ahead of dividend?|
|Thanks. Seems to be holding up well at moment|
my retirement fund