VSL - Another proposed wind down

[Wozzitworthit]

https://www.londonstockexchange.com/new ... n/15768867

Yet another of my holdings to add to the list (LBOW, AXI,NBMI ....) - OK AXI might offer conversion to something else , but the drift is similar !

[Gan020]

I don't like this direction of travel.

There seem to be 2 issues. The first is the wealth managers are facing redemptions and see winding up these funds as an easy way to access cash at an amount closer to the NAV. To me much of the persistent discount is because the fund manager hasn't spent enough time explaining what they are doing

The second is it seems to me very few people want an actively managed fund any longer. People perceive them as expensive compared to the low cost trackers. That's a pity for alot of reasons.

I have to also say that this concept that IT's should trade close to their NAV does my head in a bit. The NAV reflects the mark to market price of the investments (or at least it used to, noting some REITs and renewable trusts have moved to a DCF model for their NAV), but the price I'm willing to pay reflects my view of the future value of the investments. Their's a gap between the two and when interest rates have moved more in one month several times than they've done in the whole of the last 10 years you'd expect some differences of opinion.

[Redhill]

While the increase in sp this morning is not unwelcome, I am disappointed at the prospect of VSL winding down.

It is currently paying a solid 2p per quarter dividend and the management impress that they know how to keep that distribution continuing. I'd much rather VSL continued "as is" than I receive the NAV returned as cash distributions - finding somewhere of similar attraction to invest the proceeds won't be easy.

[ChrisNix]

I don't like this direction of travel.

There seem to be 2 issues. The first is the wealth managers are facing redemptions and see winding up these funds as an easy way to access cash at an amount closer to the NAV. To me much of the persistent discount is because the fund manager hasn't spent enough time explaining what they are doing

The second is it seems to me very few people want an actively managed fund any longer. People perceive them as expensive compared to the low cost trackers. That's a pity for alot of reasons.

I have to also say that this concept that IT's should trade close to their NAV does my head in a bit. The NAV reflects the mark to market price of the investments (or at least it used to, noting some REITs and renewable trusts have moved to a DCF model for their NAV), but the price I'm willing to pay reflects my view of the future value of the investments. Their's a gap between the two and when interest rates have moved more in one month several times than they've done in the whole of the last 10 years you'd expect some differences of opinion.

In this case Staude and cronies have a business model built around the fallacy that investment trusts ought to sell at least at NAV and VSL is fodder for their PR.

In technical terms a trust should only sell above NAV if the return on investments less operating costs is greater than the required return of the investors.

A big problem in several of these cases is that a chunk of NAV is not market derived, so the real NAV may be less than the quoted figure. VSL is probably one of these.

The manager is likely to be perfectly content to keep the vehicle going, but it's small beer for them, so if the shareholders want a wind no skin off their noses!

Not a positive for investors in the long run.

Chris