Tuesday, 25 September 2012

iCap Closed End Fund

iCap Period (Yrs) 6
May-06 May-12 Change CAGR
millions millions
Equity 138.64 400 188.34% 19.30%
LT Assets 78.13 262.658 236.18% 22.39%
C. Assets 61.49 137.364 123.39% 14.33%
LT Liabilities 0 0 #DIV/0! #DIV/0!
C. Liabilities 0.97 0.263 -72.89% -19.55%
Sales 1.02 4.586 349.61% 28.47%
Earnings -1.22 1.709 -240.08% #NUM!
Interest exp. 0 0 #DIV/0! #DIV/0!
Market cap 138.6 315 127.27% 14.66%
D/E ratio 0 0 #DIV/0!
ROE -0.88% 0.43% -148.58%
P/E -113.61 184.32
P/BV 1.00 0.79
DPO ratio 0.00%
DY range 0

Closed-ended funds: Why a discount, anyway?

Most closed-ended funds sell at a discount.

A recent sampling showed that more than 2/3rds of equity funds trade at a discount, and more than 90% of international equity funds trade at a discount. Many discounts are modest (5 to 10%), but many are 30% or more.

There is much research and speculation about why discounts happen. The debate isn't nearly as important as understanding a few of the most common reasons.

When selecting a closed-ended fund, investors must determine the reasonthe fund is trading at a discount and whether the discount is significant enought to be attractive. A discount may be justified by

  • uncertainty,
  • popularity or perceptions of the fund, and
  • the underlying asset base.

All 3 factors can work to cause a fund based on securities in Russia or Turkey, for example, to sell at a discount.

Likewise, during the heyday of the Asian Tigers, many funds based in Asia sold at a premium. The reason? Popularity and the perception of future growth and gains.

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