Pinned straw:
Reducing Exposure: Voting power back to 7.60%
6 signs you should sell | Wilson Asset Management
- Large investors exit
A shareholder owning more than 5% of a company must notify the market if they cease being a substantial shareholder.* We closely watch substantial shareholder notices announced on the ASX to identify if large investors are entering or exiting a company. When one of these large investors announces it is no longer a substantial shareholder, it may indicate they are planning to completely exit their holding. As large positions can take many weeks (or even months) to unwind, this may put downward pressure on the company’s share price in the short-term.
While we can only make inferences from substantial shareholder announcements, they can provide valuable insights which may feed into our investment decisions. Investors should note that when large shareholders announce they are no longer a substantial shareholder, they may only be temporarily exiting, or modestly reducing, their holding in the company.
For example, fund managers of open-ended investment vehicles may be forced to sell some of their shares in order to fund redemptions.
Australian Super is an industry fund that I belonged to a little while ago - I have now transferred that money to another industry super fund, called CBUS. Australian Super is Australia's largest industry super fund and like most of the larger ones, they allow members to direct how they want to invest up to 80% of their super balance, including across Australian listed companies. CBUS, when I transferred, gave me a wider range of ETFs and managed funds to also invest in (than Australian Super did, although Australian Super have since widened their own range).
When I was a member of Australian Super, I had a portfolio of ASX shares within the fund that I traded in and out of. Because they are so large (Australia's largest industry fund), and represent so many Australians, they will become substantial holders of various companies at various times and their position will move above and below that 5% "Sub" threshold as members add and subtract those companies from their individual portfolios within the fund, so what I have found is that Australian Super becoming or ceasing to be Subs is NOT indicative of any one individual or an investment committee deciding to move in and out of those companies but rather is the result of the flow of thousands of small retail investors adding or subtracting that company from their portfolios within that industry super fund. Hope that helps to clarify this.