Abrdn Diversified Income... Share Discussion Threads

[hohum1] 02/3/2023 07:06

Dividend announced: 1.42p per quarter (+1.4%). Ex div on 9 March. Paid on 3 April

[spectoacc] 01/3/2023 19:17

As a glance at the chart would attest.

[hohum1] 01/3/2023 19:00

@RCT2 - Figures on factsheet are total return. They assume that the dividend is reinvested in new shares (or at NAV) on the day they are marked ex-div.

[essentialinvestor] 01/3/2023 17:43

Last British Assets Trust NAV update (before the first Manger change ) and with debt at fair value in FEB 2015 stood at £1.45 pence a share

[thrugelmir] 01/3/2023 17:34

Wrong horse to back if you want to see the holdings liquidated and the NAV realised. PE is an illiquid holding. Given the broader PE market and collapse in IPO's and trade sales. Not likely to change anytime soon.

Never ceases to amaze me how many investors hang ionto badly performing investments in the hope of getting their money back. As a relatively new investor. I'm content to keep acquiring stock and enjoy the dividend yield on offer.

Last dividend was declared on the 15/12. Less than three months ago. Next announcement is therefore imminent. AGM was only the other day.

[rcturner2] 01/3/2023 17:30

That is NAV not total return, taken from the factsheet. You can add dividends on top.

[tiltonboy] 01/3/2023 16:29

That looks more like total return.

Admittedly using different dates, since 1st March 2018 to 28th February 2023, NAV return is negative 7.2%, and positive 15.6% when dividends are included.

In share price terms, over the same period, there is a negative return of 27.2%, or negative 4.4% with dividends included.

Newcomers might do quite well from here, but long-suffering shareholders can attest to poor performance , especially if they were invested in other incarnations of the beast

[hugepants] 01/3/2023 16:19

Be interested to see if they cut down on the buyback now! Certainly the dividend announcement looks overdue.
Happy holding this even though it would have been far better for shareholders if this was wound up. I hold some reits but I see this as less risky than a reit given the diversification and zero gearing (actually has net cash of 5%). It has a similar, if not greater, yield to many reits.

[rcturner2] 01/3/2023 16:04

The last 5 years NAV performance of the trust are:

2018 -4.7%
2019 +9.2%
2020 0.0%
2021 +11.7%
2022 -0.9%

[rcturner2] 01/3/2023 16:03

The NAV isn't drifting down.

[cc2014] 01/3/2023 15:27

I keep returning to this Trust based on the discount but I keep coming up with the same answer.

It doesn't matter what the discount is or the yield is if the investment manager makes bad decisions because the NAV will keep drifting down.

I will continue to require a bigger discount to get me interested.

[essentialinvestor] 01/3/2023 15:00

Was Home REIT one of those assets ..."...with
reliable, inflation-adjusted cash flows and income".

How much has De Silva invested in ADIG,
what's their personal holding here.

[peckers56] 01/3/2023 14:57

Extract from Abrdn "marketing" email received earlier today - may be of general interest

Nalaka De Silva, manager of Aberdeen Diversified Income & Growth Trust, is similarly circumspect. He says core inflation is proving persistent and ‘soft landings’ are difficult to orchestrate: “The US Federal Reserve is effectively killing the cycle and we have yet to see where rates peak through this year. The extent of the recession is also unknown.”

The trust is split into three main areas: equity, fixed income and credit, and reduced beta assets, which includes areas such as listed alternatives and infrastructure. De Silva says exposure to private markets brings a long term perspective to the portfolio. He admits there has been some concerns that valuations of private equity holdings do not yet reflect the weaker economic environment. He believes the high yields on offer more than compensate for any potential re-set on valuations. There are also significant discounts on many of the private equity trusts. The fund holds private equity managers rather than making individual private equity investments, which gives greater diversification.

The trust is also looking for opportunities in equities and credit markets as the economic downturn unfolds and value re-emerges. He says visibility of cash flow and inflation protection is important. As such, he has trimmed back non-investment grade bonds and unrated credit, maintaining a weighting in investment grade where there is less chance of default. The fixed income portfolio tends to be shorter-duration, with less exposure to interest rates.

De Silva believes yield is likely to be particularly important in the year ahead, as investors look for stability while capital values remain volatile and uncertain. The fund looks to have a broad mix of income sources, including listed infrastructure, real estate, private infrastructure and private credit. This helps create a stable portfolio of income-generative assets.

There are green shoots in the year ahead, but until there is greater clarity on the turning point for inflation and interest rates, some caution is warranted on financial markets. At abrdn, the focus is on finding assets with reliable, inflation-adjusted cash flows and income.

[thrugelmir] 01/3/2023 14:27

@EssentialInvestor - Hindsight is an investors greatest asset. Remember RBS's rights issue at over £12 or the sudden nationalisation of Northern Rock. Offloading large lines of stock isn't easy. People forget it takes two parties to conduct a trade. Even if you wish to bail out of a stock. Sometimes you cannot.

[tiltonboy] 01/3/2023 08:35

RCT,

Indeed the risk-free rate can change (it might even rise further), and duration risk is also an issue, so who knows!

[spectoacc] 01/3/2023 08:26

I'll give them a tiny bit of credit for selling out of it again tho - M&G were buying more after the allegations broke! Institutions truly are mug money (because, of course, it isn't their money, any more than it's ADIG's).

@RCT2 - can't say my portfolio is ever balanced, I'd rather outperform. Currently majority in the cash-esque ETFs, tho do have some ADIG for my sins.

[essentialinvestor] 01/3/2023 08:23

If anyone is unaware of Home REIT, read a few posts on the HOME BB and get a flavour of what
has unfolded there.

And before anyone counters with..it's just one among many investments, than imv misses the point. ADIG should never have been near that business.

Multiple PI's on the HOME board had warned for months on that REIT.

[rcturner2] 01/3/2023 08:13

Yes but the risk free rate will change as will bond coupons, and not in a good way. We have had a spike in those rates they will calm down over time. I am pretty sure all of us have a balanced and diverse portfolio, ADIG has a role in that.

[tiltonboy] 01/3/2023 07:25

A managed wind-down of the trust should achieve close to NAV. I'm not suggesting selling everything now, but to return capital when it becomes available. By re-investing into further PE investments, perpetuates the issue.

The vast majority of shareholders didn't vote, so does that make them happy!

Voting against the resolutions was aimed at sending a message. The directors summarily failed to stick to the 5% DCM, and took two years to abandon it. As I have previously conceded, Nalaka has done a decent job, but the world has changed.

With a risk-free rate of 4%, and decent-credit bonds matching the yield on ADIG, the case for investment is less compelling

[spectoacc] 01/3/2023 07:21

That so many are perfectly happy with ADIG's NAV performance is why I really should set up an IT of my own :)

@Tiltonboy - in as co-manager?

[rcturner2] 01/3/2023 07:11

Winding up the trust will not get you back the NAV, lots of stuff will have to be sold at a discount if they have to find buyers for everything. Despite the moaners on here it is quite clear that the VAST majority of shareholders are perfectly happy with the trust.

[spectoacc] 01/3/2023 06:52

@WUNDERBAR - the first part of your last paragraph explains why many on here want to see ADIG wound up.

[thrugelmir] 28/2/2023 22:32

Unless institutional investors step in. Retail investors alone aren't going to drive the share price higher. There's relatively little interest in UK stocks from what in the USA are called "hobby investors". Since the turn of the year in US markets retail investors have been net buyers while institutions are net sellers. This bear market is far from over. That's for sure.

[wunderbar] 28/2/2023 22:02

Re HOME REIT. In the full year report y/e 30 Sep 2022, ADIG's holding was worth £1.449m. According to ADIG's Portfolio Holding Summary for Nov 2022 [downloaded from company website] the value had plummeted to £807k [ADIG held 1.6m shares]. Note there was no mention of HOME REIT being a significant holding in the Interim report therefore we can deduce ADIG acquired majority of stock between 1 Apr and 30 Sep 2022, likely paying between 100-120p a share before bailing out in Dec 2022 around 34-50p. I reckon ADIG has lost between £800k and £1.38m on this investment. I'm sure Nalaka De Silva will be very keen to sweep this one under the carpet.

I'll say very quickly I strongly disagree with winding up the trust. I simply can't understand the mentality of anyone voting this way. Today's AGM result showed overwhelming support for the continuation of the company [almost 92% of votes]. What's to be gained from closing the trust? More than half of ADIG's investments are now in Private Markets, these investments typically take 5-10 years to mature. At present we're only 2.5 years into the new investment strategy. Patience is required here. If anyone on this bb doesn't want to play the long wait or simply hates ADIG [and there seems to be quite a few here] then simply sell your shares and move on to pastures new rather than repeating the same mantra of winding up the company. In the meantime I'm quite content to sit tight and collect the generous quarterly dividend.

I think the current share price circa 88p is very attractive entry point, offering a yield of 6.38%. So much so I've been buying up more stock in recent days and will continue should it dip further. In general this is a very boring and reliable stock. Sure, the share price performance in past few months has been disappointing but hopefully it can start grinding its way back up just as it did post Covid crash. It is still my intention to sell up to 50% of my holding around 98-100p purely because I'm top heavy in ADIG [too many eggs in one basket].

The steep discount to NAV remains a big problem and I do agree with comments about ADIG management being accountable for letting this discount persist, it's simply unacceptable, more so given the discount has now widened to 25%, a far cry from the now defunct target of 5%.

Whilst I've said patience is required here I would still be critical of the trusts performance with regards to the almost negligible growth rate in NAV. At year end it was 117.6p, five months later it's barely changed. Given we're just a month away from Interim cut off point of 31 March [half year report published three months later] it's looking odds on for another period of non-growth. Note two years ago [Sep 2020], around the time ADIG changed investment strategy, NAV was 113.4p. Since then little progress has been made, NAV increasing just over 4p [3.57%] during this period [very poor considering the market has bounced back strongly from Covid lows]. I’d like to see both Nalaka De Silva and chairman Davina Walter acknowledge this sluggish progress rather than pulling the wool over investors eyes with manipulated data. The double digit growth rate they quote is merely attributable to the inclusion of the healthy dividend income. Strip this out and the key stats reveal a pretty unspectacular performance this past 12 months with share price down 13.66% and NAV barely changed. Forget about Private Markets for a moment, why aren't Equities or Credit Income having a positive impact on NAV? For these reasons it’s easy to understand why many shareholders are dissatisfied at present.