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Djerriwarrh Investments

Fund Manager: Djerriwarrh
Inception Date: Jun 01, 1995

LIC Djerriwarrh Disappoints

Share Cafe - Jul 18, 2017

Melbourne-based Listed Investment Company (LIC), Djerriwarrh Investments has confirmed it had a miserable 12 months to June 30 as it’s income and profit lines were battered by lower dividend income and unfavourable timing in its options trading. Derriwarrah is a stablemate of Australian Foundation Investment Co and Mirrabooka Investments as well as the small company specialist, Amcil. In its 2016-17 results yesterday Derriwarrh told the ASX that earnings for the year fell 17.2% to $33.7 million, from $40.7 million in 2015-16. The company said the net operating result for the year was $33.8 million, down 19.8% per cent from $42.2 million in the previous corresponding period. [More]

We almost fell of our chairs on Monday when we saw Listed Investment Company (LIC) Australian Leaders Fund (ALF) fall almost 10% in a single day of trade. ALF is an Absolute Return manager (meaning they can buy stocks as well as short or sell stocks), whose price generally sees much lower fluctuation than the broader market due to its long/short nature. ALF manages around $360m of funds and has fairly decent liquidity, so we knew something was up to see such a large fall in a day and dug a littl ... [More]

As an alternative dividend source to the banks and property trusts, the burgeoning listed investment company sector should be on the shopping list of any self-respecting, self-funded retiree. An LIC is a basket of stocks chosen by a manager and then listed as an investment vehicle on the sharemarket. Critics of LICs contend that investors are merely incurring a management fee to invest in the usual blue-chip suspects: for example, despite recently broadening its investments into selected mid-caps, the banks still account for 25 per cent of the portfolio of the biggest LIC in the local market, the Australian Foundation Investment Company. [More]

Dividends will be lower for longer, says Djerriwarrh Investments managing director Ross Barker, after his $900 million listed investment company slashed its shareholder payout after a slide in profit. The LIC, which is managed by the AFIC group, booked a full-year profit of $40.7m for the last financial year, down 13 per cent year-on-year as the fund was hit by “remarkably divergent” equity market returns. Djerriwarrh, which seeks to generate a mixture of income and capital gains with holdings in the big four banks, BHP Billiton and Rio Tinto and several other large-cap companies, cut its final dividend to 14c a share, for a full-year payout of 24c compared with 26c last year. The outlook for next year’s total dividend was downgraded further to 20c per share with the board foreseeing a continued environment of “lower growth, lower dividend income and lower capital returns”. “We think conditions are going to be tight for dividends going forward,” Mr Barker told The Australian. “We feel in this environment capital gains are going to be hard to come by, so we felt it was appropriate to reset the dividend.” [More]

It’s official, the Australian Share Market has gone nowhere in the last 10 years. Referred to by some as Australia’s Lost Decade, the ASX 200 index closed at 5,310 on May 1 2006, and almost the same level of 5,252 on April 29 2016. What’s been missed in this comparison however is the impact of dividends on returns. Performance of shares including Exchange Traded Funds (ETFs) and Listed Investment Companies (LICs) is generally reported on their share price movements over time ... [More]

Listed investment company Djerriwarrh has managed to boost its profit despite a volatile and falling equity market, thanks to the deployment of options, and has warned of further ructions in the market. Djerriwarrh (DJW) today reported a profit for the six months to the end of December of $21.1 million, a 7 per cent increase on the prior interim profit of $19.8m. The investment house said heightened volatility and its strategy of covering call options at a high range in a falling market helped lift profit despite a six-month portfolio return of negative 4.1 per cent. [More]

One of the unique differences of Listed Investment Companies (LICs) compared to Exchange Traded Funds (ETFs) is their ability to trade at a significant premium or discount to their Net Asset Values (NAVs), also known as Net Tangible Assets (NTAs). What are NAVs and what do they mean? As explained in our guide to ETFs & LICs, an example helps explain the concept of NAVs and how they can vary with LICs. Let’s take a LIC called XYZ company.  Today it is trading for $0.80 per sh ... [More]

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