Tuesday, 30 June 2009

Should you hold iCap?

"Always look at the valuation and the price.
Value a company on a long-term basis.
Many companies are still trading below its long-term valuation. "

Would you hold icap as a fund for your investment?

Let's take a look at this by seeking answers to the following questions.

How good are the fund's managers and analysts?

When investing into icap, one is effectively employing ttb and his team to pick securities for you. ttb has a investment newsletter for many years. His philosophy and strategy are known. The few model portfolios in his newsletter have outperformed the market benchmarks. However, for many investors, his truly transparent real life performance will be gauged on his performance in icap closed end fund.

What is the strategy and how well is it executed?

Using his philosophy and strategy, ttb has consistently added value to the fund he is managing. By sticking to his approach with conviction, he has delivered excellent returns to date. More importantly, there is consistency in the returns during different environment, in good and in bad times of the investing period.

Is the fund a good value proposition?

The cost is lower for this fund than other open-ended funds in the market. As many stocks are bought and held, there is less transaction costs involved too. Also, there are times when you can invest into this fund at a steep discount to its NAV.

Have the fund and its advisor been shareholder-friendly?

Some bloggers hammered ttb on this. They lament that icap should reveal its portfolio at every quarter. icap should at the least inform the shareholders of some of the transactions. If not, how can these investors make an informed decision?

icap does keep investors up to date on changes to their fund, but only once a year. Those who are subscribers of icap newsletter may get an inkling of the stocks bought or sold indirectly.

  • How critical is it for the investors to know what icap bought or sold recently?
  • How critical is it for the investors to know what icap bought or sold recently, if they have a long-term horizon?

My take on this, is that those long-term investors into icap will find it more useful and rewarding understanding the philosophy and strategy of ttb and the icap fund, than harping on this issue constantly.

icap is one of the fund with the lowest cost I know. That to me is investor friendly. Of course, being an investor into icap may make my views less objective, but I try to give an honest appraisal of these issues.

Why has the fund performed the way it has?


The short-term track record since Oct 2005 has been excellent. Perhaps, we will have a look at this in detail later.

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