Abrdn Diversified Income... Share Discussion Threads

[spectoacc] 20/8/2021 08:05

Answering own q's via Google:


TwentyFour Asset Backed Opps Fund
"The Fund aims to provide an attractive level of income along with an opportunity for capital growth. The Fund aims to target a net total return of GBP 3 month Libor* + 5% – 8% per year. ... The Fund will choose bonds based on their risk and the attractiveness of their income."

So presumably corporate/higher risk bonds, and targetting a return above that of ADIG's.


Aberdeen Standard Global Private Markets Fund:


Not at all sure about this one:

"A ‘one-stop’ solution offering
exposure to global private
markets for investors
with liquidity and
regulatory constraints "

So why would you want to hold anything else? And 15% in CLO's or equivalent. Worth looking at the spread of what this fund is in.


Neuberger Berman CLO Income Fund

"The Portfolio aims to achieve an attractive level of total return (a combination of capital appreciation and income) by investing primarily in USD and EUR denominated floating rate collateralised loan obligations (“CLO”) mezzanine debt securities and also in US high yield debt securities"

As expected. Again, look at the yield on FAIR, or the slightly different TORO.


Concluding there's a lot more risk in ADIG than is first apparent. Predominantly a selection of funds that generally aim for a higher headline return than ADIG's, presumably to account for the 0.6% & listing fees. And what you're ultimately in may not be what you think you're in, and the diversification of holding many different funds may not work if they're all diversified in the same things.

Or put another way - I could set up an IT that promises 6% pa, then invest it in a bunch of other funds that promise 7% pa. The only reason to punt the IT would be the discount. Otherwise, just punt the funds themselves. In the meantime, I'm getting a tidy income from deciding which funds to go into.

[spectoacc] 20/8/2021 07:50

New to "new" ADIG, trying to get head around what it actually holds now.

From Factsheet:

TwentyFour Asset Backed Opps Fund - what's that actually in?
Aberdeen Standard Global Private Markets Fund - ditto
Neuberger Berman CLO Income Fund - is that what I think it is, CLO's?

Various other funds below that. So double-dipping on the fees? They're low at Trust level (0.6%) but paying at the investee co level.

And how often do the PE-style ones revalue - presumably qtly, for previous qtr, so a dip like we've had this week doesn't show up for ages.

Does the yield come all from income, or is some of it capital? Other than the smattering of renewable ITs, not seeing steady divi payers.

Attracted by discount & yield, but put off by opaqness of holdings, double charges, and what to me seems a low target for the risk taken (rolling c.6% pa when eg CLO funds yielding 10%+)

[hohum1] 30/7/2021 05:11

At last the buyback has kicked in again. Not before time..

[hugepants] 26/7/2021 13:41

It looked for a while that the discount was beginning to close here but its back up to 17% with NAV at 119.3p. The NAV is now pretty much where it was pre-pandemic but the share price is more than 10% lower. Feels really low risk with that discount, diversification, negligible gearing and above average yield. De Silva looks to be doing a bit better than the previous shower that were running this trust but not reflected in the share price!

[cc2014] 10/6/2021 11:05

Roll of drums. 100 on the bid and holding.

[hugepants] 10/6/2021 09:11

9 June 2021

Second Interim Dividend for the year ended 30 September 2021

The Board of Aberdeen Diversified Income and Growth Trust plc (the "Company") announces that it is declaring a second interim dividend in respect of the year to 30 September 2021 of 1.38 pence per share on the Ordinary shares of the Company in relation to the quarter ended 31 March 2021.

The second interim dividend will be paid on 15 July 2021 to shareholders on the register on 18 June 2021. The ex-dividend date is 17 June 2021.

[greenpastures2] 04/6/2021 15:28

I added a few more this afternoon. It is invested in things in which I would never have any exposure otherwise.

[hugepants] 04/6/2021 15:07

"The discount is too large..."

Agreed and I don't understand why it's still at 17%. It was 5%-6% pre-pandemic so there is an easy 10% upside here even if NAV treads water. In the meantime collect the 5.7% yield!

[essentialinvestor] 04/6/2021 12:51

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 11:23

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 10:37

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 17:56

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 15:25

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 07:58

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 10:08

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

[speedsgh] 14/5/2021 10:17

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

[wolstencroft] 12/5/2021 10:31

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 09:12

Hurrah - managed to get in just in time.

[cc2014] 12/5/2021 08:33

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 08:24

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 22:09

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 21:52

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 21:46

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

[krowelet] 11/5/2021 20:27

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 19:09

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.