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Acorn Income Fund (AIF)

Closed-end funds and OEICs
Heathy128
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Acorn Income Fund (AIF)

#401141

Postby Heathy128 » April 2nd, 2021, 3:41 pm

Hi all,

Has anybody received the dividend for last month's payment?

Golam
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Re: Acorn Income Fund (AIF)

#401157

Postby Golam » April 2nd, 2021, 4:47 pm

No. Spoke with HL yesterday ''nothing received''.

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Re: Acorn Income Fund (AIF)

#401222

Postby Tigger » April 2nd, 2021, 8:27 pm

Got it on 31 March with EQi If that's any comfort. HL can be a little slow with some dividends I have found.

Heathy128
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Re: Acorn Income Fund (AIF)

#401493

Postby Heathy128 » April 3rd, 2021, 8:56 pm

Tigger wrote:Got it on 31 March with EQi If that's any comfort. HL can be a little slow with some dividends I have found.


Thanks. I guess it’s a HL problem rather than a AIF problem.

ADrunkenMarcus
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Re: Acorn Income Fund (AIF)

#401664

Postby ADrunkenMarcus » April 4th, 2021, 4:22 pm

Mine isn't here yet, either.

We may have to enjoy the dividends at 5.75p a quarter while they last! As they said in February 2021:

It is the Directors' current intention to utilise revenue reserves to maintain the first and second quarterly dividend payments at the same level as the corresponding quarterly dividends for the year ending 31 December 2020. The Company currently has £1.954m of revenue reserves equivalent to 12.36 pence per share.

Although our projections do show a recovery in the Company’s revenues for 2021, the Directors believe that it is likely that a return to a sustainable and covered dividend will necessitate a lower dividend payment in future years. Noting the Company is scheduled to hold a discontinuation vote at the AGM in August this year, and that the ZDPs come to the end of their life in early 2022, the Directors aim to report to shareholders ahead of the AGM with an updated view on future dividend policy.


They currently have a 7% dividend yield so even a cut of 20% would still equate to 5.6%. AIF is trading at quite a discount to net asset value. I do wonder what will happen this year. It is right that management update shareholders on the dividend policy proposals prior to the AGM, as that will help inform the discontinuation vote.

Best wishes

Mark.

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Re: Acorn Income Fund (AIF)

#402140

Postby ADrunkenMarcus » April 6th, 2021, 9:32 pm

ADrunkenMarcus wrote:AIF is trading at quite a discount to net asset value. I do wonder what will happen this year.


This did get me thinking about the prospects for what will happen if there was a positive discontinuation vote! Any ideas?

Best wishes

Mark.

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Re: Acorn Income Fund (AIF)

#403688

Postby ADrunkenMarcus » April 12th, 2021, 6:17 pm

FWIW, it looks like the discount is narrowing, from c. 15 percent to about 11 percent. Perhaps 'Mr. Market' is taking a shine to smaller UK companies. I do hope so.

Best wishes

Mark.

Heathy128
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Re: Acorn Income Fund (AIF)

#403729

Postby Heathy128 » April 12th, 2021, 8:43 pm

ADrunkenMarcus wrote:FWIW, it looks like the discount is narrowing, from c. 15 percent to about 11 percent. Perhaps 'Mr. Market' is taking a shine to smaller UK companies. I do hope so.

Best wishes

Mark.



I hope so, too. :D

ADrunkenMarcus
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Re: Acorn Income Fund (AIF)

#412611

Postby ADrunkenMarcus » May 17th, 2021, 7:32 am

It looks like U.K. smaller companies are now irrelevant!

Acorn is proposing going global, which is one thing, but also losing the small company focus. An entirely new proposition!

Thoughts?

Best wishes

Mark

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Re: Acorn Income Fund (AIF)

#412623

Postby ADrunkenMarcus » May 17th, 2021, 8:34 am

ReallyVeryFoolish wrote:Just in time for smaller companies to outperform as the global and UK economy bounces back from the pandemic.


Quite possibly!

Certain things look promising, including the initial reduction in charges, but we need to be clear it looks like they are making a total change in mandate. The company's name will go, too - Acorn was a fitting analogy as in small plants growing into large oak trees.

I'm not yet sure how BMO's track record looks with other mandates it has.

I think the issue for me is wondering whether to hang on until the votes - if it's wound up, I'd presumably get something closer to NAV; if not, I'm in the same position anyway that AIF is changing into a completely different beast and I don't think I'd want to retain it.

Best wishes,

Mark.

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Re: Acorn Income Fund (AIF)

#412633

Postby shawsdale » May 17th, 2021, 9:06 am

I've held AIF for several years, although sadly for only a very short time before John McClure's untimely death, from which in retrospect AIF has arguably never really recovered.

At first glance the proposed new mandate goes against my rationale for holding the trust, specifically a highly geared and high yielding means of accessing UK smaller companies. It's not immediately obvious what 'edge' the proposed new mandate has over other existing sustainable global equity income alternatives.

Although AIF's current discount of over 10% gives me some pause before selling out, if only to ponder options during a long walk later today, I wonder if there might be sufficient retail investors around to trigger liquidation near NAV? Probably not.

Possible UK smaller co. IT alternatives with a decent yield include SDV, maybe ASIT - albeit these have a 'value' bent. IPU seems to have corrected last year's rather confusing messages on its dividend policy. I like Montanaro's house philosophy but MTU's recent performance has lagged the sector, whilst not offering that tempting a discount. ASCI's yield has always seemed a bit low for my liking.

Among OEICs, although not offering quite the same focus, Octopus UK Multi Cap Income has not attracted as much commentary as its performance since launch merits, and the availability of its cheaper S class units (0.45%) may be about to end, if it hasn't already. I might sell AIF to top this up and maybe one of those mentioned in the previous paragraph.

The occasional tendency of IT boards to make sharp and perhaps untimely turns in investment policy like this is one of the frustrations of the sector. AIF's NAV has begun to recover, outperforming all of the above mentioned in the last 3 and 6 months if my reading of AIC comparison charts is correct.

At least we can allocate our capital elsewhere should we desire, albeit in this case if willing to sell at a discount.

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Re: Acorn Income Fund (AIF)

#412720

Postby SKYSHIP » May 17th, 2021, 1:26 pm

Managers/Directors trying to continue their role rather than face the Discontinuation vote. If you like the new proposal perhaps better to vote it down then just buy a tracker ETF!

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Re: Acorn Income Fund (AIF)

#412759

Postby ADrunkenMarcus » May 17th, 2021, 3:42 pm

shawsdale wrote:I've held AIF for several years, although sadly for only a very short time before John McClure's untimely death, from which in retrospect AIF has arguably never really recovered.

At first glance the proposed new mandate goes against my rationale for holding the trust, specifically a highly geared and high yielding means of accessing UK smaller companies. It's not immediately obvious what 'edge' the proposed new mandate has over other existing sustainable global equity income alternatives.

Although AIF's current discount of over 10% gives me some pause before selling out, if only to ponder options during a long walk later today, I wonder if there might be sufficient retail investors around to trigger liquidation near NAV? Probably not.
...
At least we can allocate our capital elsewhere should we desire, albeit in this case if willing to sell at a discount.


My experience is similar to yours, buying in May 2013 and then sadly John McClure died a year or so later very suddenly and unexpectedly. I don't like to chop and change too much but AIF had shown very healthy dividend increases.

Perhaps I was being impulsive or impatient but I was pondering all this today and decided to sell all my AIF.

I split the proceeds c. 52-48% between my existing holdings of Murray International and Blackrock Smaller Companies, respectively. Murray International forms the core of my dividend growth portfolio and I locked in a 4.6% dividend yield, so it bolsters the current portfolio yield; Blackrock Smaller Companies is more growthy and I bought it at a c. 6% discount to NAV.

Over time, new capital is going into growthier investments and smaller cos. I also hold a lot of UK smaller companies directly. If AIF had remained as it was then I'd have been glad to hold as a geared play on UK smaller caps seems a decent place to be right now.

The discount AIF was at vs. quoted NAV was brought into perspective by Diploma's first half results today. It's a long term holding of mine and 5.4% of the portfolio. The share price is up 10%, more than making up for the perceived 'loss' between AIF's market value and assets, and Diploma sounded very optimistic. They raised the dividend even last year (from 29p to 30p) and the interim looks to have been hiked 30% or so, taking the annualised payment to around what was forecast for 2023 (39p). Quality companies can continue to surprise on the upside!

Best wishes


Mark

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Re: Acorn Income Fund (AIF)

#412837

Postby ADrunkenMarcus » May 17th, 2021, 10:03 pm

I added the statistics of my AIF holding to my 'old holdings' section in my spreadsheet.

From May 2013 to May 2021, the capital value rose 16.6% in total(!) or 1.9% a year; the dividend rose 9.7% CAGR. On a total return basis (simply adding up capital gain and dividends) I gained 61%. The dividend yield on cost reached 7.5%.

Not brilliant by any means but the total return was significantly in excess of the FTSE 100 and FTSE All Share, albeit lagging the FTSE 250 (for every £1 the FTSE 250 would have generated, AIF returned 71p). AIF had hit 474p in May 2018 so the return at that time would have been pretty impressive compared to this month's sale.

I should note, too, that I bought a tranche at 260p or so last year which means I got a 47% return on that in less than a year, including dividends.

best wishes,

Mark.

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Re: Acorn Income Fund (AIF)

#438963

Postby shawsdale » September 1st, 2021, 3:49 pm

Today's announcement regarding Acorn Income offers either a rollover into Unicorn UK Income or cash exit at close to NAV (subject to shareholder vote of course):

https://www.londonstockexchange.com/news-article/AIF/update-on-future-of-the-company/15118915

Having sold in annoyance at the rather odd Global Sustainable proposal a few months ago, I did take a small tactical position recently when the board announced a rethink as the discount was rather wide, so it will be a small short-term gain, as I'll take the cash option.

I can't help thinking of the late John McClure with a sense of sadness that the trust will be no more.

shawsdale
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Re: Acorn Income Fund (AIF)

#457659

Postby shawsdale » November 12th, 2021, 4:04 pm

The details of the Acorn Income liquidation proceeds have been announced this afternoon:

https://www.londonstockexchange.com/news-article/market-news/publication-of-elections-residual-nav-per-ord-share/15210918

Those (like me) who elected for cash will receive 406.2686p per share, in w/c 15th November.

A slightly frustrating quirk is that value equivalent to just over 4p per share is being held in a Retention Fund as the Liquidator has been unable to sell one of the fixed interest holdings. If that particular holding can't be sold in the interim it might mean a wait until that particularly security's maturity date of 2024 for this remaining 4p per share to be returned to shareholders.

So, in my case this story ends with a double-digit percentage gain in three months from a late re-entry, having sold a long-standing holding in pique a while back when the abortive move to the completely different BMO mandate was first announced. I still can't help thinking how different things might have been without John McClure's sad death.

An interesting decision about to where to invest the proceeds in the coming days.

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Re: Acorn Income Fund (AIF)

#457672

Postby Tigger » November 12th, 2021, 4:37 pm

Looks like that final holding they can't sell is "APQ Global Limited 3.5% CULS 30/09/2024"

It basically never trades looking at the LSE website so it's little wonder selling £0.7m of it has proved problematic
https://www.londonstockexchange.com/sto ... mpany-page

Makes you wonder why they thought it was appropriate though. I guess they bought it a while ago when it was first issued but it's now just a loan to an AIM company with a £7m market value ?!?

ADrunkenMarcus
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Re: Acorn Income Fund (AIF)

#458033

Postby ADrunkenMarcus » November 14th, 2021, 8:53 pm

An annoying little detail like that makes me glad that I sold AIF in the market. I sold it for less than the liquidation value but bought BRSC which has gone up meanwhile.

Best wishes


Mark.

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Re: Acorn Income Fund (AIF)

#460253

Postby Impvesta » November 23rd, 2021, 9:46 am

Having selected the cash option I was expecting the proceeds to land soon after 15th November, and certainly last week, but nothing yet from my holding in HL. Anyone else received anything yet?

ADrunkenMarcus
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Re: Acorn Income Fund (AIF)

#460255

Postby ADrunkenMarcus » November 23rd, 2021, 9:49 am

Not applicable to me as I sold in the market, but on another forum a poster had received a reply from HL saying they received it 19 November and are now distributing it to client accounts.

Best wishes

Mark


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