ASX Market release on 25 June 2021:
"Red River secures offtake deal with Glencore for Hillgrove gold Highlights:
• Red River Resources signs offtake agreement with Glencore International AG for gold concentrate produced from Hillgrove’s Bakers Creek stockpile
• Glencore is also Red River’s copper offtake partner at Thalanga Base Metal Operations
• Red River has commenced trucking gold concentrates from Hillgrove.
Red River Resources Limited (“Red River” or “the Company”) (ASX: RVR) is pleased to announce it has signed an offtake agreement with leading global commodity producer and trader Glencore International AG for gold concentrate produced at its Hillgrove Gold Mine in New South Wales. Red River commenced gold production from Bakers Creek stockpile material in December 2020 and will sell 100% of gold concentrate produced at Hillgrove to Glencore under the offtake agreement. Red River trucked its first load of gold concentrate from Hillgrove on 18 June 2021."
(I hold RVR)
In the words of the great philosopher Homer J Simpson – “to alcohol the cause of and solution to all life’s problems"
Woolworths has separated itself from boozing, likely to bolster the ESG profile. The added benefit is it also means they get out of owning hotels and all the other nasties like poker machines, and other gambling such as Keno and TAB. In Queensland to have a bottle shop, the bottle shop needs to have an associated pub. To facilitate this, Woolworths were one of the largest owners of pubs in the state.
This new brand holds all the familiar outlet brands. Dan’s, BWS, Cellardoors, Jimms plus a few others in over 1500 stores and 300 something pubs. The pubs contain more than 12,000 of the aforementioned pokies.
Despite being chucked out of Woolies, they are not completely against boozing and gambling, they will continue to hold just under 15% of the company. The two will also stay friends, well paid up friends, sharing supply chain and logistics, some branding, and business support. Compensation to Woolworths will be circa $550k per annum.
With approximately 40% of Australians consuming alcohol weekly and over 5% daily there is a ready market although the consumption levels have been on a slow decline for years.
Interestingly, according to Roy Morgan consumption increased in 2020. We got on it during lockdown it seems.
If you can get over the ethics of the business, this is one for the watchlist.
Should I Buy VAS Analysis
VAS provides exposure to the largest 300 Australian businesses in just one product. It has proven the ability to outperform 81.70% of active strategies.
Who Should Buy VAS
VAS is used by many investors to gain exposure to a broad basket of Australia’s biggest public companies in an efficient manner. It can be suitable for beginning and advanced investors to add equity diversification to a portfolio. The fund may be used by itself or in conjunction with other funds depending on your portfolio goals. Here are some popular ideas of how it can be used in a portfolio: Creating The Ultimate ETF Portfolio
Vanguard recommends it for:
Buy and hold investors seeking long-term capital growth, some tax-effective income, and a higher tolerance for the risks associated with share market volatility. With a minimum suggested investment timeframe of seven years.
Ticker Code: VAS
Benchmark: S&P/ASX 300 Index
Number of Holdings: 307
Assets Under Management: $8.5B
Management Fee: 0.10%
Portfolio Turnover: 0.82%
Inception Date: 4th May 2009
Income Distributions: Quarterly
Distribution Reinvestment Plan: Yes
Total 10-Year Returns: 8.64% p.a
VAS Share registry: Computershare. Through Computershare, you can manage your holdings and communications, and also select whether or not to reinvest distributions.
The Vanguard Australian Shares Index ETF or VAS is the largest ETF by funds in Australia. The ETF has $8.6 billion in funds under management or the total fund amount of $24.73 Billion. VAS provides low-cost, broadly diversified exposure to Australian companies and property trusts listed on the Australian Securities Exchange. It also offers potential long-term capital growth along with dividend income and franking credits.
The ETF is a passive index fund tracking the S&P/ASX 300 Index.
Vanguard Australian Shares Index ETF seeks to track the return of the S&P/ASX 300 Index before taking into account fees, expenses, and tax. Source: Vanguard
Due to the nature of the Australian economy, VAS is heavily weighted towards Banks and materials. We can see in the graph below that Financial Services account for 29.25% of holdings and Materials a further 19.95%. That’s 49.2% combined. In our top 10 holdings, all of the big four banks are listed, these four companies account for 20.36% of all holdings.
Although VAS is highly diversified amongst Australian companies it is heavily weighted to Banks and materials. Meanwhile, technology businesses are very unrepresented account for only 4.41% of holdings.
VAS Shares Fees
When we compare the total fees of these VAS, A200, IOZ, STW over the course of twenty years we see the differences are minor. VAS performed the best with total fees of $1,967 compares to STW with fees of $2,774 (a difference of $807).
Although A200 has the lowest management fees, VAS has the lower total fees due to average bid/ask spread
The cumulative total returns of VAS over the course of 10-years are 129.13% and 202.15% since its inception in 2009.
At the current rates, VAS pays a distribution of $1.9786 or $2.6448 gross. This gives VAS a dividend yield of 2.10% and 2.81%. The distribution amount and yield are relatively low to the historical trends, this is due to the underlying equities reducing dividends during the COVID recessionary period. As profits return we will see this yield again increase to its old average and trend of over $4 per holding. The historical average yield for VAS is 4.41%.
Should I Buy VAS ETF: Retail Fund VS ETF
The Vanguard Australian Shares Fund can also be purchased as a retail fund. This means instead of simply buying and selling the fund on an exchange like an Exchange Traded Fund (ETF), you instead buy the fund directly through Vanguard. As a result, no brokerage is paid in trading. However, the retail fund is slightly more expensive with fees of 0.16% pa.
Either option can be a great investment strategy and the differences are pretty minor between the retail fund or ETF option. The difference in annual fees for $10,000 over the course of a year is $6. Depending on your frequency of buying and selling will depend on which option will be cheaper in the long run. However, the differences will be very minor, and we consider them negligible in most cases.
Passive Vs Active: SPIVA
This report found 81.70% of actively managed funds fail to outperform the S&P/ASX 200 index.
Full Analysis if interested: https://prophet-invest.com/should-i-buy-vas-etf
Thanks for reading :)
Perennial Value continue to increase their holding in MDR from 11.27% to 12.29%.
A good strategy can be to follow the fund manager flow in small / microcaps.
24 Jun 21: Perennial Value 12.29% from 11.27%
13 May 21: Perennial Value 11.27% Initial
25 Mar 21: Jencay Capital 5.02% Initial
14 Dec 20: Regal Funds ceasing
10 Dec 20: Regal Funds 5.10% [17.78m] from 6.22% [15.43m]
23 Nov 20: Perennial Value ceasing
19 Nov 20: Perennial Value 5.31% [13.16m] Initial
29 Oct 20: Regal Funds 6.22% from 7.23% @ $0.39-$0.63
29-05-20 Regal Funds 7.23% [17.84m] from 8.37% [20.58m]
Annoucements like this from PIQ "World-first predictive test for Diabetic Kidney Disease could save $384 billion over 10 years" put me off management straight away.
It tells me a lot about management when they stress things like TAM (Total Addressable Market) in the billons as a small or microcap company. It is a red flag to the quality of the management that they may be more of a salemen / marketer than a quiet acheiver who can tell me realistically what is actually acheiveable.
And to mark it as a market sensitive annoucement is a bit galling too.