The Investment Manager, Forager Funds Management Pty Ltd (the Manager), has occupied the role and managed the Forager Australian Shares Fund (the Fund) since inception of the strategy in 2009. The Manager was launched by Chief Investment Officer Steve Johnson at this time under the banner of Intelligent Investor Funds Management Pty Ltd, part of the Intelligent Investor Group, a subscription-based publishing business focused on investment opportunities, later being renamed to Forager in 2014. The managed investment scheme had operated as an unlisted fund prior to admission to the official list of the ASX as a Listed Investment Trust in 2016 when the Fund reached size capacity (net assets of $146.3m as at the Prospectus date in 2016).
The investment objective of the Fund is to outperform the S&P/ASX All Ordinaries Accumulation Index over a rolling 5 year period, which is sought to be achieved via an actively managed portfolio of concentrated securities predominantly outside the S&P/ASX 100 with a contrarian value bias. The portfolio has historically held between 15-25 securities, now drifting towards 35 investments to reflect growth in the Fund, the investment management team (Including Steve, 2 PMs and 3 Analysts across the Australian and International strategies) and enhanced portfolio liquidity requirements as a result of this trend. The Manager seeks to acquire securities that are assessed to be substantially undervalued at the time of acquisition, with investment ideas founded on internal research through fundamental bottom-up security analysis.
Prospective investors must be comfortable with the success of security selection (see Figure 2) and a potential higher volatility/drawdown risk that may come with concentrated holdings, especially during periods of market distress. This segment of the market can however, give the Manager a competitive advantage through information asymmetry, and where alpha generation is more viable (also see Figure 2).
Bell Potter’s Indicative NTA tracks the ‘indicative’ movement of a LIC’s underlying NTA each month by monitoring the percentage movements of the disclosed holdings and using an index to track the movement of the remaining positions. The Indicative NTA works best with LICs that have a high percentage of investments concentrated in its Top 20, regular disclosure of its Top 20, lower turnover of investments, regular disclosure of its cash position and the absence of a performance fee. We have also included an adjusted indicative NTA and adjusted discount that removes the LIC distribution from the ex-dividend date until the receipt of the new NTA post the payment date. This report is published each Monday prior to the market open and is available on a daily basis. Intraday indicative NTAs will be available on request through your adviser.
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