Pinned straw:
Thought I'd have a look to see how much of NTA gets drained just for this pile of crap to run every year.
We'll call it $1.65 mil in expenses each year. We'll leave the interest on the notes out because we're going to use Net Assets to calculate the MER.
Based on Net assets of $28.8 mil this means that this vehicle is sucking up 5.7% of NTA annually just to keep running.
That's being generous too, because I think it's debatable whether the deferred tax assets should be included in the calculation.
The management of NAOS like to send out every couple of weeks a cheery little email entitled “CEO Insights by NAOS Asset Management”, which is no doubt designed to give the impression NAOS management are astute and close to all things business in Australia. NAOS management obviously understand the importance of keeping an anaesthetised and preferably brain-dead shareholder base.
In their latest email they lead with the following quote from the MD of Dymocks Retail: “From a consumer’s perspective, that large-format bookshop is very attractive. There’s so much choice to have a look at. But it’s very, very hard to make money in large-format bookshops because the cost of doing business is very hard”.
I wonder in their quieter moments if NAOS management reflect on their own business model along the lines of: “From a shareholder perspective our NAOS funds are a complete loser, with usurious fees and lousy performance. But fortunately our shareholders don't have much choice, and its very very hard to lose when you have captive shareholders in a Listed Investment Company structure. We are proud we have turned Norman Lindsay’s ‘The Majic Pudding” into a biography. Though keeping a straight face when talking to shareholders is very hard”.
Good thing they can't pick stock for sh*t or there would be a performance fee as well.
The flat fee looks too high for their net asset, so it wouldn't surprise me one bit if they are charging management fees on the borrowed money as well.
This is by some miracle actually trading at premium atm and they have the nerve to do a SPP cash grab. Incredible!
@PeregrineCapital I used to run a subscale LIC, an experience i never want to repeat. there are so many issues with them i wont repeat them all here (i have before!!). i think they are sinkholes and the only chance of redemption for investors is corporate activity. the NAOS guys actually bought a fund i was involved in, it has not been a happy tale since ( i believe). surprisingly (to me) i get a lot of pushback with my negative LIC views from retail investors, not so much institutional investors unless they have a vested interest of course!! lol.
below from my last ASA preso
You cant just look at the costs without also considering the benefits @PeregrineCapital ;)
