Abrdn Diversified Income... Share Discussion Threads

[essentialinvestor] 04/6/2021 13:51

There is also opportunity cost, what else were you looking at and how has
that performed over the same timeframe etc.

My cat Gump, not known for his intellect, could make returns in current market conditions.

[cc2014] 04/6/2021 12:23

Share price finally creeping up consistently. Funny how I'm now looking at it and thinking I should have bought more whilst at the time I didn't want to overcommit.

Indeed I'm still looking and thinking I should buy more but I shall resist. The discount is too large but I'm not convinced De Silva can consistently turn 6% although I will be satisfied with say 5.5%. Not sure he can do that either but as long as it doesn't go below 5% it won't concern me.

[essentialinvestor] 01/6/2021 11:37

The % discount is more than warranted imv.

If they can fulfill their performance mandate then things may begin to
look a little different.


How many does De Silva hold...


I'm a believer in watch what they do, not what they say.

[wunderbar] 28/5/2021 18:56

Thanks to everyone who responded to my question re ADIG management fees.

Having watched Nalaka De Silva’s presentation I've noted some key points. Performance measure: NAV total return (defined as change in NAV plus dividends reinvested) of 6% per annum over a rolling five year period. The growth element will come from Private and Alternative markets. The goal is to reposition the fund as follows: Private Markets 45%, Listed Alternatives 20%, Fixed Income & Credit 25%, Equities 10%.

Following info taken from the Earnings slide: How does the portfolio translate to Earnings? As the portfolio transitions the predictability of earnings will become clearer as we gain more exposure to contracted cash flows from Infrastructure Assets and Credit Investments (>65% of Earnings Per Share). Additional earnings will be sourced from alternative income sources such as Emerging Market Debt, Specialised Finance and Royalties. We believe these reliable income streams will support ADIG’s ability to continue to pay sustainable dividends.

A question was posed to De Silva asking if there was any kind of discount target (re NAV), he said the boards objective would be to get within 5% (currently c.18%). De Silva himself said he hopes to see ADIG “trading at close to par in a couple years time". He went on to say, “I’m pretty happy to be a fairly boring dividend play for a short period of time while we grow and provide some stability for investors”. END.

As I’ve said before I’m very happy for ADIG to keep plodding on, steady as she goes, boring dividend play indeed. Who can complain with the stock generating almost 6% yield at current price. Talking of which we’ve seen a steady rise of a few pence over the last week or so, almost touching 98p now (noting 6 month trading range 92p-100p). Given the large discount to NAV (117p) I’d expect the gap to reduce considerably within 6-12 months, perhaps even touching 105p-110p.

However, should De Silva’s reboot strategy fail to have any meaningful impact on NAV or share price in the next 12-18 months then both he and the board of directors will have some explaining to do, especially as the previous Aberdeen manager oversaw a c.20% decline in share price over a 5 year period, truly diabolical. Of course it’s still early days noting the change of investment strategy only became effective from AGM date of 23 February 2021. Whilst I’ve always viewed ADIG an income stock, by virtue of having the word ‘growth’ in its title it’s about time this stock actually did what it says on the tin… GROWS!

[hugepants] 25/5/2021 16:25

NAV still trending north here at 117.2p. Yield 5.75%. Discount still 18%-19% though but it will close at some point.

[speedsgh] 20/5/2021 08:58

You’ll have probably heard me say a number of times that one of the great strengths of the investment companies sector is its ability to adapt to changing circumstances. This week, I thought I would look at two funds that have not fulfilled their potential but have been revamping their investment approach – JPMorgan Multi Asset Growth & Income (MATE) and Aberdeen Diversified Income & Growth (ADIG). The prize, if they can demonstrate real improvement, could be considerable...

... The changes at ADIG, which were approved by its shareholders in February this year, involved a change of portfolio manager to Nalaka de Silva, the adoption of the same objective as MATE – 6% per annum over rolling five-year periods, a commitment to a progressive dividend with top-up from reserves if necessary, and a repositioning of the portfolio to include a greater proportion of private market (unlisted) investments. The trust also redeemed a large chunk of its expensive debt.

What ADIG hasn’t done yet is sort out its discount, which at the time of writing stands close to 19%. The shift to greater unlisted exposure complicates this and probably prevents the adoption of an active buyback policy. The board may be hoping that an improvement in returns does the job, but for an investment company looking to deliver low volatility returns, discount volatility is unhelpful...

[hohum1] 19/5/2021 11:08

£4.03 bid for John Laing Group. It was a £4.6m position for ADIG at the end of April

[speedsgh] 14/5/2021 11:17

Playback of this week's QuotedData presentation by Nalaka de Silva is available here -

[wolstencroft] 12/5/2021 11:31

No real plans to narrow discount. Very limited returns projected to Dec 2024. 6% or less p.a. Can't see this moving anytime soon. Quite disappointed with the manager who seemed very self-confident yet couldn't really answer where his 6% return on NAV will be coming from.

[cc2014] 12/5/2021 10:12

Hurrah - managed to get in just in time.

[cc2014] 12/5/2021 09:33

Re151.

How do I attend this event. I registered yesterday, the software said my registration had been sent to the meeting organiser but I have no email giving me a link to attend.

Even clicking on current events does not help me!

thanks

[colonel a] 12/5/2021 09:24

WUNDERBAR,
Re 152.
I get a similar screen for anything I buy in my SIPP, where I think it may be a legal requirement.
I think that the information comes from the KID/KIID, but I've never found it particularly useful.
The information includes dealing costs and internals.
HP has obviously done the research that we should all have done on ADIG.

[riskvsreward] 11/5/2021 23:09

I think this is a fund of funds kind of trust that means compounded charges, which I dislike, especially if the funds in their portfolio are unit trusts and etfs. If they are close-ended trusts on discount, you may get compounded discounts which if big enough may make the double charges more bearable.

[hugepants] 11/5/2021 22:52

ASI, ADIG’s investment manager, is paid an annual management fee of 0.5% of net assets up to £300m and 0.45% thereafter. Investments in ASI funds that invest directly in alternative assets, such as infrastructure or property, are charged at the lowest institutional rate, while fees charged on ASI funds that do not invest directly in alternatives are waived or rebated to ADIG. There is no performance fee. Management fees and financing costs are charged at a ratio of 60% to capital and 40% to revenue (with effect from 1 October 2018; previously 65:35). At end-FY20, ADIG’s ongoing charges were 0.84%, unchanged compared to end-FY19.

[tiltonboy] 11/5/2021 22:46

Nobody is exempt from paying the annual management fees, they are deducted from the NAV as they accrue.

[krowelet] 11/5/2021 21:27

Bought just before the close this afternoon, there was not a screen of extra charges just the usual price paid, stamp duty and commission exactly like any other stock.

I have never found any difference between buying inv.trusts and any any other share and always assumed the charges were reflected in the running costs of the trust.

[wunderbar] 11/5/2021 20:09

I have a question for investors on this bb, particularly those of you holding ADIG in a standard shares account or ISA. I should start by saying I've bought this stock half a dozen times over the past five years (using same investment platform) and never paid a single penny in annual management fees, never paid any ongoing charges to Investment Manager, only costs incurred have been initial buying costs + stamp duty. However, when I attempted to buy some more ADIG shares this morning during the process a screen popped up with a breakdown of all charges to be incurred (never seen this before) - this time aside from quoting the usual buying/stamp duty costs it also mentioned ongoing charge of 1.8% paid annually to ADIG's Investment Manager. As soon as I saw this I aborted the transaction.

Has anyone on here ever incurred such fees? If so how is the fee paid to the Investment Manager, is it taken directly from your standard shares account/ISA? Many thanks.

[speedsgh] 11/5/2021 10:15

For those existing/prospective shareholders that have lingering questions/doubts over ADIG and its performance/strategy, the QuotedData Specialist Income webinar tomorrow (Weds 12 May) would be the perfect opportunity to find out more. Nalaka de Silva (portfolio manager and chair of the ADIG Investment Committee) is presenting for approx 40mins from 10:10 and those registered can submit questions in advance via email (and possibly online during the webinar?).

[essentialinvestor] 05/5/2021 22:25

gp, point taken.

[tiltonboy] 05/5/2021 22:19

Explains the constant tap

[greenpastures2] 05/5/2021 19:14

I regard it as a useful source of income EssentialInvestor but I don't have much invested in it.

[essentialinvestor] 05/5/2021 18:44

I've sold out of HDIV so looking for opportunities,
but ADIG still looks moribund, perhaps a play on a possible wind up vote.

[hugepants] 05/5/2021 18:32

Schroders have sold 5%. Still 5% to go.

[greenpastures2] 19/4/2021 19:56

Timing is very difficult to get right. I did manage it on Feb 27 last year but by then it was pretty obvious markets were going down. But although most of the stocks I held dropped between 15 and 50% not all did and I haven't bothered to calculate the counterfactual. I know I would have doubled my money with one of the small tech companies had I held it.

[hugepants] 19/4/2021 18:58

Agree. I don't think there are many investment trusts that look cheap now but I think this is probably one of them. Nav=115.25p and yield=5.7%.