Discussion in 'Managed Funds & Index Funds' started by Simon, 25th Nov, 2005.
Opinions and discussions please?
Ummm..... what are we discussing Simon?
Or have I lost the plot?!!!
Well now you've edited and attached the link, makes things a little easier
Mind you, sorry I can't be of any help- not my area
I have been thinking about this one. Here is the recommendation from InvestorWeb:
Global Masters Fund Limited IPO
By InvestorWeb Research - Managed Funds, 19 Oct 2005
Invest in Berkshire Hathaway A Stock!
Global Masters Fund Limited (GFLS) is a new offer that combines investment in Berkshire Hathaway A Stock (up to 80%), wholesale bonds and cash funds. GFLS is a listed investment company with a growth investment objective. It seeks to achieve long term capital appreciation in global investments with a history of high returns.
Berkshire Hathaway Inc. has achieved an average return of about 22% over the past forty years and at over $80,000 per share is beyond the reach of many retail investors
Who is GMF?
Global Masters Fund Ltd (GFLS, the Company) will be a Listed Investment Company (LIC) on the Australian Stock Exchange (ASX) investing primarily in Berkshire Hathaway Inc A (BRKA) shares, which are listed on the New York Stock Exchange (NYSE).
BRKA is a well-known investment company, which has been managed for 40 years and is currently chaired by Warren Buffett, the famed US investor. The investment style of BRKA is value oriented, with a long-term buy and hold mentality. BRKA is a well diversified company which has investments in many industries and substantial equity positions in several corporations. BRKA is currently trading at around $US 82,000 per share, and so is out of the reach of most investors.
6 Good reasons to invest
GFLS will issue shares, together with a stapled option, at $1.00. The option allows investors to receive another share in GFLS for $1.00 and is exercisable from the date of de-stapling on 1 December 2006 to 30 November 2007.
Between 65% and 80% of funds will be invested directly into BRKA, depending on the amount raised.
The company will have an initial Net Asset Value (NAV) of $0.97, which compares relatively well to most LICs.
The company will put into place a buy back scheme, whereby the shares (or stapled securities) will be bought back at regular intervals at NAV, less a 5% administration fee. APL offers a dividend reinvestment plan.
Growth Equities Corporation (GEC, the Management Company) has a five year contract to manage the GFLS, which is shorter than many contracts issued by newer LICs, which often have 25 year contracts
Fees are moderate for the company, with the management fee being 0.85%pa plus GST and reducing down to 0.65%pa plus GST for additional assets under management.
Who should invest?
GFLS will suit investors who are:
Wanting an established history of high returns and a record of superior performance.
Trying to enhance the returns of their self managed super fund.
Seeking the flexibility and liquidity of an ASX listing.
Wishing to access cost efficient ways to gain exposure to world class United States Listed stocks.
InvestorWeb Research Rating: STRONG BUY
The one thing that I thought when I read about this - and it doesn't relate directly to the fund - was: How long before Buffett dies? Bit morbid, yes - but the question is 'When Buffett finally offs it, is Berkshire going to be able to continue achieving what it has been with Buffett at the helm?' Also, are there any guarantees that the stock isn't going to go into freefall after he dies as well?
That's looking at it from a long term perspective of course. Also, I dunno about putting money into something that relies so heavily - up to 80% - on one stock. Kinda like putting all your money into one house.
Just my thoughts on it.
I was thinking the same thing.
The shares in Berkshire Hathaway might be appreciating at 22% per year, but what about Berkshire's underlying assets? It still could be worth it, I would need to look into Berkshire quite a bit before investing.
What happens to the Navra Fund if Steve drops off his perch?
I suspect that they have well considered this over at BH given that WB is a bit long in the tooth already?
...Or any fund for that matter
Managed funds performance does vary according to who is at the helm.
As for BH... don't really know enough about it...would be interesting to know what their succession plannings is
In my opinion, the key man risk with NavraInvest is in fact lower than with most other managed funds because the NavTraDE system flags the entry and exit points and volumes and the initial stock selection and filtering whilst somewhat subjective, is pretty straightforward.
Just my 2.2 c worth.
ps. of course we all hope Steve has many many happy returns ahead of him!
Yes, exactly Nigel. The fund itself doesn't rely *too much* on Steve, which I feel is very appealing in that *if* something did happen to Steve - god forbid - then the fund would be able to continue trading in much the same way without him.
I wonder just how reliant BH is on Buffett. He's certainly an exceptional man - there's absolutely no doubt about that and I also have no doubt that they do have a succession plan in place, the question is - Do they have someone who can pick up where Warren left off?
I have no doubt the company has an adequate succession plan, but what about the share price? Surely the share price is highly inflated because people want to get shareholder information from Buffett.
Yeah Charlie Munger is no spring chicken either.
Too many variables for my liking to get into this. But that's just a personal view.
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