Acorn Income Fund Ld Share Discussion Threads

[orinocor] 20/7/2020 19:32

Yes indeed a terrible miscalculation! Not nearly as risky as I've suggested.

[biggest bill] 20/7/2020 18:59

Orinocor, I've had a look at ipu. The last time I looked at ipu, the discount was only 5% so it looks much more attractive now. I might buy a few shares there as well.

[biggest bill] 20/7/2020 18:42

Orinocor, the gearing figure of 67% is not 67/100 of the assets; it is 67/167 of the assets which is 40%.

[biggest bill] 20/7/2020 18:34

Orinocor, You have miscalculated badly. The investments would have to fall by 60% to achieve a nav of zero. Since more than a quarter of the investments are fixed interest securities, this seems rather unlikely to put it mildly.

[orinocor] 20/7/2020 18:18

I'm not sure about this one at all. If the value of the investments fall 33% the NAV goes to zero! Very, very unlikely but who knows what could happen in the months ahead. As a comparison I have been buying Invesco Smaller Companies trust. The epic code is IPU. You can currently buy these shares at around the mid price so the discount is 15%-16% and it has no gearing. On the contrary the latest factsheet to the end of June shows it to have net cash of 1.9%. So a completely different risk profile but the shares were 50% higher at the start of the year so a lot of potential upside and for me a much better proposition.

[biggest bill] 20/7/2020 18:00

I had a look at rmmc but that has recovered much further from its March lows. I think the upside here is much greater. Rmmc also has a much bigger bid/offer spread than aif which is very offputting.

[riverman77] 20/7/2020 17:42

I think this is a lot more geared than any of the other trusts, but I agree the discount looks too wide and I actually picked some up this morning. RMMC is another one that looks far too wide (that's around 30%).

[biggest bill] 20/7/2020 17:29

Riverman, other similar trusts trade at a much lower discount and the points you are making also apply to those trusts. The discount here is anomalous.

[riverman77] 20/7/2020 17:25

I notice that they also have a put option - this should presumably offer some protection if there is another big market fall.

[riverman77] 20/7/2020 17:24

The fixed income portfolio isn't risk free though so should still be included in the gearing calculation.

[biggest bill] 20/7/2020 17:21

I noticed that the shares bottomed out at 215p in March when the ft100 fell under 5000. The current price is not much above that.

[brwo349] 20/7/2020 17:14

This level of gearing is not for the faint of heart. What if FTSE tests 5000 again?

[biggest bill] 20/7/2020 17:13

More than a quarter of the portfolio is in fixed interest securities. This means that the real level of gearing is more like 20 to 25% to the stock market.

[riverman77] 20/7/2020 17:06

Gearing is now 67% after recent market falls - not sure if that's a factor behind the wide discount.

[biggest bill] 20/7/2020 16:47

This trust appears to have fallen under the radar at the moment. I would like to buy a few more tomorrow but the problem is that I am now fully invested in the stock market. I will have to make a decision over what to sell to buy more here. On a two or three year view, this looks like a tremendous buying opportunity.

[2wild] 20/7/2020 16:34

Also added today at 234p a 24% discount to the net asset value on close of play Friday of 307.84p.

[biggest bill] 20/7/2020 16:13

I bought a few shares today. The discount here is absurd. It is way out of line with discounts on other similar trusts.

[2wild] 19/7/2020 17:40

Looking back at my history I paid 226.75p on July 6th about 3 weeks after the last ex div date which may have been The Turning Point.

[2wild] 19/7/2020 17:22

Given both recent buys and sells were around 3p within the official spread, this would suggest there is no longer àny overhang as you would not be getting a 3p price improvement on sells.

[biggest bill] 18/7/2020 21:58

I am considering buying here because of the huge and growing discount. Small uk companies have been really hammered this year and look very good long term value. The discount here looks really out of line compared with other small company investment trusts. Is there a share overhang which is forcing the price down recently?

[2wild] 17/7/2020 11:51

I sold SDV at 135.2p, above NAV last month. Been buying AIF at dicounts of 20-26% over last few weeks. Yesterday sold ASIT at 1% below NAV. All 3 trusts invest in smaller higher yieldig companies and geared by a Zero Pref. Discount here is very odd.

[whilstev] 15/7/2020 14:29

Added at 232.4 . 25% discount.

[2wild] 02/7/2020 16:14

Added at 238.9p, well below the 250 mid price. Nice 20% plus discount to net asset value and currently paying 9.6% in dividends.

[speedsgh] 29/4/2020 10:07

Annual Financial Report - HTTPS://www.investegate.co.uk/acorn-income-fund--aif-/prn/annual-financial-report/20200429070000PFFCC/

[speedsgh] 28/4/2020 14:41

Dividend Announcement - HTTPS://www.investegate.co.uk/acorn-income-fund--aif-/prn/dividend-announcement/20200428131451P0BFA/ The Directors are pleased to declare a second interim dividend for the year ending 31 December 2020 of 5.75p per Ordinary Share which represents an increase of 10.58% compared to the corresponding dividend for the year ended 31 December 2019 and maintains the level of dividend set by the increase in the first interim dividend. The impact of COVID-19 on the earnings of many UK companies is causing them to reduce or cancel dividend payments and this will impact on Acorn's earnings for 2020. Acorn is however, in the fortunate position of having revenue reserves, at 31 December 2019, equal to 1.04 times the 2019 dividend and the Directors consider the current situation is one in which it will be appropriate to draw on those revenue reserves. It is too soon to judge how severe or prolonged the disruption to UK corporate earnings will be and the Directors will keep the level of future dividends under review. Ex-Dividend Date 11 June 2020 Record Date 12 June 2020 Payment Date 29 June 2020 Dividend per Share 5.75 pence per Ordinary Share (Sterling)