market value should resume today. AORD has reached a four year high and the AUD is also showing strength.
Does anybody on this board follow KHI? If you do, what do you think the market value will do over the next year? I'm hoping the dividend will hold and that the fund will return to trading at a premium to NAV like it has done for so long.
Last Fall FAX was 96% in Australia with a problem of loads of old bonds maturing in the next 5 years. Since that time due to new policy changes that portfolio certainly has a different flavor. With yields in the 5% area in Australia it not easy paying out over 10% on assets after expenses. Hence the Fund's decision to invest elsewhere.
Here's a few trends . Presently the funds Australia assets represents 78% of the portfolio, down from 80.2% from March and from 82.2% in Feb.
It also appears the fund took some profits in South Korea in March as that countries % dropped from 11.2% to 9.6% in April. Why I don't know with all these Aussie bonds maturing. The South Korean portion is only 1.6% in local currency too.
As a % of the whole, which might not truly represent underlining money flows but might be of interest.....Thailand's % is slowly increasing, China dropping, New Zealand slightly up,korea leveling in at roughly 10%. Of course all these are small factions of the portfolio. The overall trend seems to be working towards the 33% in other then Aussie bonds.
OK Here's the deal� no more numbers, no more statistics I'm just going to give it to you straight.
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I bought the rights and oversubscribed for addtional shares at the $8.30 too. The deal was not fully subscribed so all those that over-subsribed will get filled 100%. The stock will be under some pressure for the next week or so I'd say because of the full allotment.
Everen (the new name for old Kemper)came out with a buy yesterday. KHI is a typical high yield fund that has only been allowed to leverage only 10% of their assets verses most that lever 33%. THis has changed and they will now leverage 25% of the assets to "stabilize" the dividend. Of course it will have the opposite effect on the price.
The dilution will be appx. 3% of the present NAV which will put this fund at a 2-3% discount. A low for this fund.
The yield is just OK but I feel is more secure then most of these funds as many, like FAX, push for the highest that is reasonable.
My plan as usual is monitor is closely over the next month. If within a month I don't see this fund north of $8.50 I'll sell it. My expectations for it are KHI in the high $8's within 1-2 months. So I'd give a shot. With commissions so low, if you wrong just get rid of it is my feeling.
I oversubscribed as well to KHI and feel about the same about the same way you do. I sold two thirds of my position at 10 3/16 and oversubscribed by enough to re-establish my original position.
Anyway, I think we may have gotten lucky with FAX. I took my position at 5 9/16 late last year and am optimistic that the NAV of FAX will continue to rise for a long time which will drag the market value with it. I wouldn't be surprised to see a special dividend or two from strong capital gains in addition to the regular dividend or maybe an increase in the regular dividend as the market value increases to keep the yield up.