Hardboy
24 Jan 2017
Re: Winding UP Rober,"As you have already asked the question "I've not doe yet - had a very busy day; and may not have time tomorrow, but will do before the weekend; so if you want to ask the question first - please go ahead.
Hardboy
24 Jan 2017
Re: Winding UP "cash option for me too"5 out of 5
strapuk
24 Jan 2017
Re: Winding UP Yes, cash option for me too I'm afraid. The alternatives are just too lame duck and incestuous for my liking.
Rober01
24 Jan 2017
Re: Winding UP "£350,000 has been deducted" You also picked up on this. There seems to be some ambiguity as to whether the NAVs quoted take into account this deduction or not. I will seek clarification on this. Hardboy I see this as vital. As you have already asked the question I will not duplicate the question with M&G. I await the answer with great interest!!!
Rober01
24 Jan 2017
Re: Winding UP HardboyPurely out of curiosity why do you intend to wait to indicate your preference.If markets collapse what advantage do you see in waiting. Surely whichever option you choose, you will receive exactly the same value?
Hardboy
23 Jan 2017
Re: Winding UP Vitabrevis,Thanks for joining the discussion - it's nice to know there are other shareholders reading this DB. Thanks to for your post - some excellent points. "As far as I can see, no stocks have been sold during the recent record stock market levels, to 'lock-in value '." But the last update did show a slight movement of funds into Bonds as I noted in a post at the time. "£350,000 has been deducted" You also picked up on this. There seems to be some ambiguity as to whether the NAVs quoted take into account this deduction or not. I will seek clarification on this. Around 6 months ago I wrote to M&G to seek some clarification about how the winding up would be managed, and they said then, that a similar sized fund had been liquidated and the wind up costs were £325k. So I was not surprised when I saw the figure. I am not sure if the fund's holdings will be liquidated before roll over. That is not clear. I suspect for people choosing the OEIC rollover option, from M&G fund to M&G fund, it is practical to pass over some of the holdings, but I don't see how this will happen with the Investment Trust rollover option. Of the 3 options only the income option has any synergy with the holdings. I haven't studied the OEIC options - I refuse to invest in Open Ended funds. To summarise I would have thought that some of the rollover options must incur selling off the fund's holdings also. I am sure they have talked to their main shareholders and know what they will be doing; but they must realise that the options being offered are not as attractive as the existing fund, so there will be a sizeable contingent of shareholders opting for the cash alternative. Thus they should be selling off some of their holdings to protect the value of OUR fund. One thing that impresses me about M&G is their speed of responding to shareholders' queries and the detail of their response. So I am sure you will receive a speedy reply and I will be very interested to hear it. My stockbroker has just written to me to ask what my preference is, They give me till 11
0 on 27th February to make my selection, so I will delay making the decision till much closer to that date - just in case markets collapse - but currently, like you I will be selecting the cash option. (That's 4 out of a sample of 4 now.)
Rober01
23 Jan 2017
Re: Winding UP I note your concerns and that you have written to M&G, expressing them. I will be interested in the reply you get.From memory as a good deal of this trust is held by the institutions, it would be hardly surprising if they were to look after their own.Nevertheless, they are duty bound to look after the minority interest. This is a matter of interpretation and I have had experience of a previous minority situation which did not go so well, so good luck with that!!I personally feel the costs of winding up are a little steep, but it is what it is.I am now going to concentrate on my reinvestment plan for the proceeds.
vitabrevis
23 Jan 2017
Re: Winding UP I also have a substantial holding of Income Shares and have decided to take the cash option.I have some serious concerns about the scheme of wind up and how the trust is being managed in the run up to March 17th.The reasons for offering rollover options as well as the standard cash option is to help those shareholders who would otherwise have a CGT liability on liquidation of the trust, and obviously to try and maximise funds maintained under management for M&G, (although they unsurprisingly do not give that as a reason).In order to provide a rollover option that will not attract a CGT liability, the trust ( and the management have admitted this is the strategy being employed), will have to ensure that all assets transferred across to the rollover vehicles are in-specie, and not cash. They expect at least 50% of shareholders to take the rollover option.This has in effect created 2 classes of shareholder in this rundown period...the rollover and the cash option shareholders. Thus, because the management will have to keep most assets invested (even if market conditions turn against those assets), right up till March 17th, the are potentially now de facto managing the trust in the interests of the rollover shareholders and potentially (in the event of a market downturn), not in the interests of cash option shareholders.As far as I can see, no stocks have been sold during the recent record stock market levels, to 'lock-in value '. This seems a risky/reckless strategy for the Income Shareholders to me...just to help some people with their tax obligations and doesn't seem equitable.I have recently written to the managers and Chairman, expressing my concerns....perhaps if you share them you would like to do likewise?Another issue I have doubts about, is the mention in the memo released Friday stating that £350,000 has been deducted to cover the cost of liquidating the whole trust...But if the intention is to transfer the majority of assets in-specie, why are they deducting the cost of liquidating all the assets ? Is a proportion of that money going to be put towards the cost of offering the rollover? If so, then that surely would also be an example of cash option shareholders being treated inequitably?...but perhaps I am reading that bit wrongly?I would welcome your opinions Hardboy and Robert.
Hardboy
20 Jan 2017
Re: Winding UP "an amount of £350,000 has been deducted from the Net Assets" - that implies it has already been subtracted, so the NAV now quoted is already minus those costs. That's good. I got a reply to my e mail. I have to say - full marks for speed of response, and even fuller marks for the detailed response. I'll try to give the salient points.The full details of the rollover options will be sent to shareholders shortly. Extra info is on their website[link] [link] includes a link to the JPM fundsAdditional costs involved in transferring shares will be met by JPM & M&G.JPM will charge investors additional costs as outlined in the scheme. (Didn't se that.) There will be a charge of 0.14p per share to cover the wind up fees (amazingly my guesstimate was very close.) This says "there will be" implying it has not yet been taken off the NAV. He is also clear that the liquidation costs will be taken from all shares not just those opting for the cash option. And yes, basically, the final NAV, less wind up costs will be what is used to purchase shares in the IT or units in the UT for the roll over options. I will check out the JPM funds, but I'm still heavily biased towards the cash option.
Rober01
20 Jan 2017
Re: Winding UP the following from the reconstruction proposals answers the question -:"In calculating Shareholders' and Unitholders' entitlements under the Scheme an amount of £350,000 has been deducted from the Net Assets of the Company to reflect a reasonable estimate of the costs which the Company would have needed to incur had the Scheme not been put forward and the Company simply been placed into liquidation at the end of its fixed life. M&G Securities and JPMF will meet the substantial additional costs to be incurred by the Company above those of a simple liquidation as a result of putting forward the Rollover Options. In the event the Scheme does not proceed and the Company is placed into simple liquidation M&G Securities will meet any additional costs of such liquidation.Cheers
Rober01
20 Jan 2017
Re: Winding UP Cheers - Noted . Sorry I had forgotten your previous comment.On the question of distribution of costs I presumed the Funds taking the interests of those who take them up will pay for them, rather than the individuals concerned. After all those individuals are still receiving the benefit, albeit through the Funds. To do otherwise would be unfair treatment of certain shareholders i.e those like us taking cash.
Hardboy
20 Jan 2017
Re: Winding UP "the cost of £350000 will obviously reduce the per share value returned."If you check my post of 26th June last year I did the calculations then. M&G had suggested winding up would cost around £325k, so still in the same ball park. I calculated that as being a cost of 0.13p per share, but that assumed the cost spread evenly across all share holders. If the costs are just going to be piled on to those choosing the cash option (does the announcement say that?) then obviously it depends what proportion opt for the cash option. You will, I will, and my Dad will - so from a random sample of 3 share holders that's 100% opting for cash. (Shame it's not a larger sample.) I guess a lot of the institutional holders will opt for a transfer (more incest!)
Rober01
20 Jan 2017
Re: Winding UP I will take cash and as this will be a large sum have already started planning where this will go across my existing portfolio. My intention will be to to maintain (so far as possible) my existing relationship with the FTSE Allshare index.Incidentally, I am too idle to work it out, but as a cash participant, the cost of £350000 will obviously reduce the per share value returned.
Hardboy
19 Jan 2017
Re: Winding UP I think there is still information missing from their release. Specifically how will the number of new shares/units in the fund be calculated at the transfer date if one selects the transfer option.My guess is the NAV value of the M&G hi Income shares will be used to buy shares/units in the chosen fund at the appropriate date.E.g. If the NAV of one's M&G shares is 57.04 at the deadline day; and you decided to transfer your shares to the JPM Income fund, and the ask price at the same time is 108.75 then you would get 0.525 shares in the new fund for each share in the old fund,. (That figure being 57.04/108.75)I have written to M&G to clarify this mechanism, and also to confirm exactly which are the funds to which we can transfer (if they give LSE tickers there should be no confusion.) I must say the prospect of transferring to funds paying less than 4% yield is a bit of a come down from the 12% or whatever we have been used to with out holding.
Hardboy
19 Jan 2017
Re: Winding UP OK, now we have all the options laid out. We just need things to stay fairly stable to mid March. (Some chance!)Looking at the Interim Report they have moved a little more money into bonds - it's now around 26% of the portfolio up from under 23%, 6 months ago. I'm not even going to look at the Unit Trust options. I had a quick look for the JPM ITs on Trust Net and could not find them, but will have a good look soon. The description of the first is intrinsically against my ideals. It's a JPM trust which invests in JPM funds. So basically a highly paid management team just stick their money into their colleagues funds and help pay their salaries too. It's everything that is wrong with the Financial Services industry - completely incestuous. Still I won't let my prejudices stand in the way of a good investment (which I suspect it won't be.) At the moment Cash is my favoured option; and I think we have a good long time before having the make the decision if I read the timetable correctly (6th March.)
