Abrdn Diversified Income... Share Discussion Threads

[boystown] 30/11/2023 11:24

I'm generally out of my depth with ITs - so rely on the expert posters on here.

Nevertheless, ADIG seems to offer relative safety with no gearing, a 30% discount and a 7.36% yield; so what's the catch?

[thrugelmir] 28/11/2023 16:58

October factsheet is the ADIG website.

Full portfolio data was published on the 14th November. Agan accessible in Excel spreadsheet form from the website.

The company has also provided the market with daily NAV's and regular gearing updates.

The information is all there if you look.

[rcturner2] 28/11/2023 16:47

You may have been looking at a cached version of the site stored on your local machine.

[cc2014] 28/11/2023 16:11

Thanks Tiltonboy.

I've looked again and cannot replicate my earlier problems which is odd

[tiltonboy] 28/11/2023 15:41

CC

Not certain where you are looking, but the latest factsheet on their website is to 31st October!

hxxps://www.abrdndiversified.co.uk/docs?editionid=d3e4c879-2180-4b43-a264-bf06db1fdbf6

[kenmitch] 28/11/2023 15:09

CC2014 Why not use the excellent aic website for the sort of information you’re struggling to find on inferior websites!



AIC is the official trade body for Investment Trusts. Loads of info on their excellent website.

[cc2014] 28/11/2023 14:22

Another look at this produces the following.

The last published factsheet on Abrdn's website is June. ffs. Which if I try and access it I can't actually read as it requires me to log into Morningstar. How am I supposed to make an informed decision based on that.

ffs.. indeed you can't even get the annual accounts or KID without signing in to Morningstar.

Not to worry I can get the completely out of date June factsheet from HL and I have also discovered if I dig around at length I can get the top10 porfolio holdings as at the end of September on the abrdn website. Not that all of them make any sense unless you cross reference with the factsheet as the third largest holding is described as Aberdeen Standar GBP.



Their second largest holding is UK gilts. Ishares Core ETF which has an average maturity of about 2026-27 looking at it. so, that's paying around 4.25%, less than the underlying yield so I'm entirely dependent on capital gains to make that work which since they've been holding them since June looks unlikely.
Or maybe they parked it there for a while whilst awaiting a sell-off and have moved on. Only I have no idea because even the most recent data is 60 days out of date.
And I wonder why do this rather than buy back shares.

Honestly I give up with this Trust. Well I would, but the large discount keeps nagging away at me.

[hugepants] 24/11/2023 16:03

Even the boys at the IC are perplexed by the underperformance of this trust.



...Some adjustments to the portfolio reflect Liddell’s contrarian instincts when it comes to both yield and valuation. He ups the exposure to Abrdn Asian Income in part because it comes with an attractive dividend yield (5.5 per cent) and share price discount to NAV (14.4 per cent) and even increases exposure to Abrdn Diversified Income & Growth, the multi-asset vehicle whose board recently concluded a strategic review. The board made the case for sticking with the trust's current multi-asset investment approach and to embark on a series of "enhanced distributions" to shareholders through a combination of special dividends and a tender offer. The trust holds other funds and has heavy exposure to unlisted assets, with smaller allocations to bonds and equities.

The trust's shares have languished on a discount for some years and Liddell, like some others, remains perplexed at its fortunes. “It remains somewhat of a conundrum why the market is so against this trust,” he says. “The income has kept up and there doesn’t seem to be an indication the dividend is likely to be chopped. While capital performance is disappointing the yield is still attractive and we still hang onto it.”

[rcturner2] 10/11/2023 07:13

I used to hold this in the past. At 75p this looks interesting again.

[sll] 02/11/2023 17:34

Thanks speedsgh - very useful!

[speedsgh] 02/11/2023 15:17

Some commentary on the ADIG situation in the latest Money Makers podcast...



From 37m31s to 41m57s

[thrugelmir] 31/10/2023 14:14

Doesn't really matter what the wider market thinks. The reality of the situation is what it is at the current time. Anybody investing in private assets that aren't traded on public markets should be aware of the illiquidity risk involved. Share investing after all is a long term activity. Though in recent times there's been much speculative activity. Sure way of eventually getting your fingers burnt.

[essentialinvestor] 31/10/2023 12:47

HP, with the greatest of respect you appear to consistently give ADIG the
benefit of any doubt - the wider market no longer does.

[cousinit] 30/10/2023 18:04

I can't get excited by the current situation. Appreciate sentiment in the sector is dire but the Board talked up the prospects from the review only to serve up some very thin gruel.

Noticed this is one of the trusts Saba now has on its books. Can't see this placating them unless it's a small position in a basket picked up from a keen seller.

[hugepants] 30/10/2023 08:26

spec where does it say "..that [private markets] it would be worth very significantly less than NAV if disposed of earlier"

The rns actually says;

"...the Board concluded that the early disposal of private market investments in current market conditions would necessitate a substantial discount to their long term realisable values"

Big difference imo.

And they are clearly correct. Selling anything now is likely the worst option. Even the listed stuff eg. RHM was bought out at a 66% premium to its then share price.

[spectoacc] 30/10/2023 06:54

@HP - after a long review, they're chucking us 1.65p (not £1.65 - I wish) and a fairly poxy tender.

The shocker (for me) is that it's end-2026 for "..A substantial portion.." of the private stuff to mature, later clarified as 33%, & that it would be worth very significantly less than NAV if disposed of earlier.


"As noted above, approximately 33 per cent. of the Company's current NAV, comprising existing private market investments, is expected to mature by the end of 2026. The remainder of the private markets portfolio is expected to mature between 2029 and 2032.."


They won't make 2026 without another review IMO, let alone 2032. They ought to have rolled into another fund, and offered a cash exit (at a discount) to shareholders wanting out.

Between divis & tenders, they're going to eventually shrink to an inefficient/uninvestable size, and be increasingly skewed towards the private holdings.

[hugepants] 29/10/2023 20:32

I disagree with the general tenor of above posts. IMO the enhanced distribution programme is pretty significant. And it's on top of the current 5.68p annual dividend payout (7.5% yield).

Special dividend of £1.65p (goes ex this week) = £4.97M
Therefore tender offer next year of £27.5M.
If tender at the suggested 15% discount then tender price = 94.5p (29M shares)

Therefore tender for 9.5% of your shareholding at a 25% premium to current price next year.

As the tender date nears the share price discount the tender price is bound to narrow. No way will it be 25% higher as it is now. The other thing is you will be able to tender all your shares. You wont get filled but eg. the last 2 tenders I participated were GOT and ARTL. Both last year and only 31% and 9% of shares were tendered in each case. So good chance you will get significantly more than 9.6% accepted.

But the above is only the first year.

"...further enhanced returns of value, including special dividends, are envisaged during 2025 and 2026 as a substantial part of the Company's private markets portfolio matures.

...Approximately 33 per cent. of the Company's current NAV, comprising existing private market investments, is expected to mature by the end of 2026. "


And comments regarding the current market cap;

"...58.5 per cent. of the Company's existing portfolio is invested in private markets with the balance being held in listed investments and bonds (as at 30 September 2023). The Investment Manager believes that ADIG's listed and private portfolio has a much greater intrinsic value than that currently reflected in the share price.."

This is a better investment IMO than most other investment trust type vehicles IMO. It has net cash and is well diversifed.

[hohum1] 28/10/2023 11:11

Quite agree, Specto. The Board are a disgrace. They mostly own v few shares and so don’t suffer our pain. At the very least, they should stop the manager reinvesting realisation proceeds while the discount to NAV is so wide. The trust is already subscale and the tender will worsen that. No-one, apart from yield hungry retail investors, is going to buy this. It needs to go into run off. Vote against continuation and the board

[spectoacc] 27/10/2023 14:53

You mean that 1.65p special dividend didn't placate you? ;)

I agree.

[28cesar] 27/10/2023 14:50

As a long suffering shareholder, I am sad to say this old investment trust has in my opinion come to the end of its useful life. We must all do the right thing here and VOTE TO NOT CONTINUE THIS TRUSTS LIFE AT THE NEXT VOTING OPPORTUNITY.
It should then begin the lengthy process of selling assets and obtain the maximum for each. Even if it takes 2 or 3 years, I will be happy to wait.

[spectoacc] 26/10/2023 19:28

The disappointing things are: 1. How long this review took; 2. That this supposedly the best possible outcome - where, quelle surprise, everybody gets to keep their jobs; and 3. That a tuppence ha'penny return over the next 14 months is going to be enough to placate battle-worn shareholders.

[ferrox5] 26/10/2023 18:47

Saba Capital has a position here according to Citywire so they may agitate for more action

[hohum1] 26/10/2023 17:56

The rise in bond yields and ballooning discounts across the trust world have given them the easy option to row back. Basically, they are saying you can have 15% of your money back, probably at a 15% discount, and after that we carry on, business as usual. Green infrastructure and more private credit investments are not going to float anyone's boat any time soon. They should have stopped new private market investments and returned ALL realisation proceeds to shareholders until the discount narrows to sub-10%. This is dead money for some years to come. Vote against the board and against continuation at the forthcoming AGM.