The listed investment fund announced its half-year results on Monday, and set its dividend at 7.25 cents per share fully franked – equal to the same corresponding period last year.

The company said regarding the dividend:

Based on the interim dividend declared and the final dividend paid, the dividend yield including franking on the net asset backing is 6.6%. This represents an enhanced yield of 2.6 percentage points higher than that available from the S&P/ASX 200 Index when franking is included.

Benchmark missed

The fund said that for the six months to the end of December, its portfolio return, including franking, was 2.1%, which underperformed the S&P/ASX 200 Index (ASX: XJO), which returned 4.2%.

Over 12 months, the fund also underperformed, returning 5.5% compared with 11.5%.

The fund said in its report:

Djerriwarrh's relative underperformance over these periods was heavily impacted by the cumulative effect of being underweight in gold and critical minerals companies, which have risen significantly, and the decline in the share prices of EQT Holdings and CSL. Djerriwarrh typically does not have exposure to small and mid-cap sized companies in gold and critical minerals as they are very cyclical investments and do not produce dividends of any significance. It is also difficult to write call options over many of these companies.  

The fund's net operating result for the half was $19.7 million, down from $21 million for the previous corresponding period.

The fund went on to say:

In the current highly valued market, we have allowed many option positions to be exercised and have maintained a net cash position for the majority of the period. We also don't have exposure to small and mid-cap resources which have risen significantly over these periods. These factors have all impacted relative portfolio returns but we have been able to maintain a significant fully franked dividend yield ahead of the market which is a key objective of Djerriwarrh.

The largest contributors to Djerriwarrh's income were BHP Group Ltd (ASX: BHP), Woodside Energy Group Ltd (ASX: WDS), Transurban Group (ASX: TCL), Region Re Ltd (ASX: RGN), Rio Tinto Ltd (ASX: RIO), CSL Ltd (ASX: CSL), Woolworths Group Ltd (ASX: WOW) and Telstra Group Ltd (ASX: TLS).

The first half dividend will be paid on February 23. The dividend reinvestment plan remains in place with zero discount applied.

Djerriwarrh was valued at $822.8 million at the close of trade on Friday.

The post A major change to the Djerriwarrh dividend is on the way appeared first on The Motley Fool Australia.

Most investors are familiar with the primary way that an ASX share can return capital to its investors: by paying out dividends. But share buybacks can be just as lucrative as a dividend, and could even be preferable in some circumstances.

Even the legendary investor Warren Buffett has frequently discussed his love of share buybacks and why he favours a buyback over paying out a dividend at his company Berkshire Hathaway.

How does a share buyback work?

A share buyback is, well, all in the name. A company buys back its own shares on the open market, just as any other investor would. However, instead of holding the shares over time, as you or I might, the company retires or destroys them.

This has several consequences. Firstly, by reducing the supply of available shares, a share buyback puts upward pressure on the company's share price. That's because, under the laws of supply and demand, reduced supply leads to higher prices. So that's one win for shareholders.

Fewer shares also mean that all remaining shareholders see their actual ownership of the company rise. Say I own 10 shares of Company X, and Company X has a total of 100 shares outstanding. As such, I would own 10% of the company.

But if Company X buys back 10 shares from the open market, and retires them, there are now only 90 shares outstanding. I still own my 10 shares, but instead of a 10 % ownership, I now own 11.11%. That entitles me to more of the company's earnings and dividends as a result. And, unlike a dividend, this all happens without me having to pay any tax.

If a company makes a habit of buying back its own stock, it can have a huge impact on shareholder returns over time.

Which ASX stocks have been buying back their own shares in 2023?

So let's talk about which ASX shares have been buying back their own stock in 2023 so far.

Luckily for us, we don't have to sift through ASX notices to find out. The data has been compiled for us by S&P Market Intelligence. So here is a list of some of the ASX shares that have conducted share buybacks in 2023 to date:

• Amcor plc (ASX: AMC)
• Cochlear Limtied (ASX: COH)
• Qantas Airways Limited (ASX: QAN)
• Australian Foundation Investment Co Ltd (ASX: AFI)
• Eagers Automotive Ltd (ASX: APE)
• AMP Limited (ASX: AMP)
• Pinnacle Investment Management Group Ltd (ASX: PNI)
• Objective Corporation Ltd (ASX: OCL)
• Helia Group Ltd (ASX: HLI)
• Temple & Webster Group Ltd (ASX: TPW)
• Djerriwarrh Investments Ltd (ASX: DJW)
• Estia Health Ltd (ASX: EHE)
• Kogan.com Ltd (ASX: KGN)
• OFX Group Ltd (ASX: OFX)
• Mayne Pharma Group Ltd (ASX: MYX)
• AMCIL Limited (ASX: AMH)
• Garda Diversified Property Fund (ASX: GDF)
• US Masters Residential Property Fund (ASX: URF)
• Cogstate Limited (ASX: CGS)

Many of these shares, including Qantas, Cochlear, Eagers Automotive, and Kogan, have had exceptionally strong share price growth this year so far. And from what we know about buybacks, there's little doubt that these were at least partially assisted by the companies' actions in buying back their own stock.

The post Returning capital: These ASX companies have been buying back their shares in 2023 appeared first on The Motley Fool Australia.

Here's a short recap of the Australian market:

• S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) lower 0.65% to 6,653.00
• ALL ORDINARIES (Index: ^AXAO) (ASX: XAO) lower 0.63% to 6,746.20
• AUD/USD at US 70 cents
• Gold at US$1,414.77 an ounce
• Brent Oil at US$66.75 a barrel

The best-performing ASX 200 share today was the St Barbara Ltd (ASX: SBM) share price which went up 5.1%.

However, the share price of AMP Limited (ASX: AMP) fell 15.8% after the sale of its AMP Life business seems to fallen through and the interim dividend probably won't be paid.

The Perpetual Limited (ASX: PPT) share price fell 5% after issuing its fourth quarter funds under management (FUM) statement.

The share price of Praemium Ltd (ASX: PPS) jumped 11.25% as it released its June 2019 update to investors.

The Elders Ltd (ASX: ELD) share price was unmoved today because it was in a trading halt for an acquisition and capital raising.

FY19 has only just finished but Djerriwarrh Investments Limited (ASX: DJW) has already released its report, sending the share price down 0.3%.

Another business that was quite heavily in the red today was the Carsales.Com Ltd (ASX: CAR) share price which dropped 4%.

Finally, the share price of Telstra Corporation Ltd (ASX: TLS) fell 2% today, making it one of the bigger declines at the large end of the market.

Here are some of today's top stories:    

• 3 ASX recession proof dividend shares
• ASX retailers striking back at Amazon.com's Prime Day event
• The new housing bubble threat to ASX banking shares that isn't from Australia
• What should you do with your tax return refund?

The post ALL ORDINARIES finishes lower Monday: 8 shares you missed appeared first on The Motley Fool Australia.

Here's a short recap of the Australian market:

• S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) higher 0.26% to 5,850.10
• ALL ORDINARIES (Index: ^AXAO) (ASX: XAO) higher 0.27% to 5,909.80
• AUD/USD at US 72 cents
• Gold at US$1,292.06 an ounce
• Brent Oil at US$60.98 a barrel

The best-performing ASX 200 share today was coal business Whitehaven Coal Ltd (ASX: WHC), its share price increased by 3.7% following the release of its quarterly report.

Another strong performer was South32 Ltd (ASX: S32), the miner's share price rose by 3.6% after it also released its December 2018 report.

The Kogan.Com Ltd (ASX: KGN) share price gained over 22% today because of its trading update for December 2018.

Shares of Aristocrat Leisure Limited (ASX: ALL) fell 1.6% today, perhaps due to the US Justice Department saying that all online gambling that crosses state borders is now illegal.

A2 Milk Company Ltd (ASX: A2M) shareholders became 3.7% wealthier today as the dairy products business was one of the top ASX200 risers.

Listed investment company (LIC) Djerriwarrh Investments Limited (ASX: DJW) reported its half year result, investors didn't seem to like what they saw with its share price dropping 1.8%.

At the red end of the ASX was Syrah Resources Ltd (ASX: SYR), its share price dropped 5.7%, giving up the gains from earlier in the week.

Finally, the share price of online property listings business Domain Holdings Australia Ltd (ASX: DHG) rose 3.2%.

Here are some of today's top stories:

• Australian house prices to be the worst in the world this year, says Fitch
• Why UBS thinks this small cap is too cheap to ignore any longer
• Leading brokers name 3 ASX dividend shares to buy this week

The post ALL ORDINARIES finishes higher Thursday: 8 shares you missed appeared first on The Motley Fool Australia.

Djerriwarrh Investments is a listed investment company (LIC) that has been operating since 1989 and was listed on the ASX in 1995.

For the first six months of FY18 the LIC reported that the net operating result was down 1.9% to $16.4 million.

Revenue from activities for the half-year was $17.5 million, 8.7% higher than the prior corresponding period.

The interim dividend is maintained at ten cents per share. Five cents of this relates to prior years' capital gains which the company has paid tax on, which means that some shareholders can claim a tax deduction in their tax return according to the company.

The dividend re-investment plan is in operating for this interim dividend and investors can utilise this to receive a 5% discount to the average selling price of shares traded on the ASX in the five days from the day the shares begin trading on an ex-dividend basis.

The company has calculated that net tangible assets per share before any provision for deferred tax on the unrealised gains or losses on the long-term investment as at 31 December 2017 was $3.36, before allowing for the interim dividend.

Djerriwarrh said that the portfolio return over the last six months was 7.2%, including franking credits it was 8.6%. The twelve month return was 8.9%, including franking credits it was 11.8%.

Djerriwarrh attributed the biggest contributors of its performance to BHP Billiton Limited (ASX: BHP), Westpac Banking Corp (ASX: WBC), Wesfarmers Ltd (ASX: WES), Rio Tinto Limited (ASX: RIO), South32 Ltd (ASX: S32) and Macquarie Group Limited (ASX: MQG).

At 31 December 2017 its top holdings were Commonwealth Bank of Australia (ASX: CBA), Westpac, BHP, National Australia Bank Ltd (ASX: NAB) and Australia and New Zealand Banking Group (ASX: ANZ). Its holdings are quite similar to the index.

Djerriwarrh's performance was adequate but wasn't exciting. However, I think there are quite a few LICs and shares that are better dividend options.

The post Djerriwarrh Investments Limited reports half-year result appeared first on The Motley Fool Australia.

It was an unlisted managed fund until December last year when it converted itself to a listed investment trust where it's now known as FORAGER AU UNITS (ASX: FOR).

Forager's Australian Shares Fund's top 5 investments to 30 June 2017 were Macmahon Holdings Limited (ASX: MAH), Reckon Limited (ASX: RKN), NZME LTD FPO NZX (ASX: NZM), Cardno Limited (ASX: CDD), and Enero Group Ltd (ASX: EGG).

Their willingness to depart from the index and focus on special situations sets them apart from many of their competitors in my opinion.

But funny things can happen when a managed fund closes and lists itself on the ASX.

The value of a fund at any point is now set by the on-market buyers and sellers of its securities, and the fund's day-to-day value is less influenced by the pre-tax Net Asset Value (NAV) of its underlying investments.

In Forager's case, there's clearly an emotive reaction to Forager's excellent past performance and investors are bidding the price of the Forager Australian Share Fund up well above its underlying value.

This is happening because of two things:  there are a lot of satisfied existing investors — my wife included — who don't want to sell, and there are new investors wanting a piece of the action.

The result is that Forager's listed Australian Shares trust is now trading at $2.11 per unit, well above its most recent pre-tax NAV of $1.75.

That's a 20% premium!

Investors buying these units at well above its pre-tax NAV have been warned though.

Forager's Chief Investment Officer, Steve Johnson, has tempered expectations by advising to not extrapolate its recent history of 25%+ returns that it achieved over the last 12 months.

Which is why I think the current listed unit price is a little silly.

There are other listed investment funds [listed companies or LICs in this case] out there too with a similar problem, including the ones below:

Foolish takeaway

If you're going to invest in a listed investment company or trust, I think you'd be better off by buying at or less than its pre-tax NAV which will give you a margin of safety.

Paying too much can leave you exposed to a nasty capital loss, a) because of the fall in the underlying investment, and b) because of the possibility of unitholders in the respective listed investment funds bailing out.

Given the choppiness of share markets in the short-term, it wouldn't take much to see a material decline in the underlying value of funds under management.

But of course, you shouldn't just look for 'cheap'. You also need to look for a manager that has an investment strategy that aligns with your personal investment philosophy, and doesn't charge an exorbitant amount in fees.

Alternatively, you can further research company share ideas yourself.

As a starting point, I can't recommend strongly enough the 11 simple lessons that are contained in the report below which I believe will give you some useful insights into managing your own money.

The post Are these listed investment companies safe in a share market crash? appeared first on The Motley Fool Australia.

The good news for investors is that LICs come in all shapes, sizes and varieties. Want large cap exposure – there are several LICs for that. Want small to medium cap exposure, again there's a number of LICs that will give you that. Want international exposure or an absolute LIC that can go long as well as short – well, there are LICs for that too.

These 10 LICs all offer the benefits of diversification as well as strong dividend yields – most fully franked too…

Source: Company reports, Capital IQ, Commsec

While the yields look very attractive, investors also need to consider a range of other factors including; whether the share price is at a premium or discount to the LIC's net tangible assets, if the LIC has a large number of options outstanding (which can dilute the shares), what the historical performance has been like as well as management fees, if the dividend yield is sustainable and what the underlying assets are in the LIC.

What is particularly interesting is that the two-largest LICs, Australian Foundation Investment Co.Ltd. (ASX: AFI) and Argo Investments Limited (ASX: ARG) both offer relatively lowly yields of 4.2% and currently trade at a premium to the underlying assets.

The 10 LICs above may well be much better options.

The post 10 listed investment companies with yields of 6% or more appeared first on The Motley Fool Australia.

However, listed investment companies (LICs) may offer a viable alternative to an index tracker. Managers generally don't earn performance fees so running costs are low and implied fees are often similar to those of trackers.

I compared the performance of four LICs, Djerriwarrh Investments Limited (ASX: DJW), Diversified United Investments Limited (ASX: DUI), Mirrabooka Investments (ASX: MIR) and Milton Corporation Limited (ASX: MLT) against the SPDR S&P/ASX 200 Fund (ASX: STW), an index tracking fund.

The ten-year annual compound returns include both share price gains and dividends adjusted for franking credits and after management fees. For the LICs, management expense ratio (MER) is admin costs divided by average portfolio market value over the year to June 2015.

From the above information, it looks like any one of the above LICs is superior to the index tracker but there are several additional factors to consider before drawing this conclusion.

Most importantly, the share price movements of the LICs do not necessarily correspond to the value of their portfolios. For example, ten years ago Mirrabooka was trading at a 10% discount to its net tangible assets (NTA) and is now trading at a 12% premium. These valuation gains are unsustainable and do not reflect the underlying performance of the company.

The following table is based on gains in NTA per security rather than share price to unwind this effect. Collectively, the LICs still performed better than the index fund using this measure but by a smaller degree.

The second column shows how the current share price of each company compares to its most recently disclosed NTA per share value. Although prices follow NTA values over the long-term, if you buy an LIC when it is trading at a premium to its NTA, you are likely to experience lower returns as the valuation gap closes over time. Interestingly, Djerriwarrh commands the highest premium to its NTA yet delivered the worst ten-year performance of the companies.

The next problem is that it is impossible to know if the last ten years' performance will reflect the next ten. Each company has a different investment approach and so a closer look may reveal some clues.

Djerriwarrh Investments holds a portfolio made up of large-cap stocks and uses a small amount of debt, currently $75 million to leverage returns. The company also writes options to enhance returns which are covered by its equity holdings. Based on the performance figures in the tables above, it is questionable whether the use of options and debt enhances returns to shareholders at all. Despite having the worst ten-year performance, administration costs were the highest of the four LICs at $3.8 million in 2015.

Similar to Djerriwarrh, Diversified United Investments primarily holds large-caps and also uses a small amount of debt, currently $85 million. In November 2014, it raised $103 million to diversify into International shares which now make up 9.8% of its total portfolio in the form of unhedged exchange traded index funds. Administration costs were just over $1 million in 2015, the lowest of the four LICs.

Mirrabooka Investments is the smallest of the LICs with a market capitalisation of about $350 million and specialises in holding small and medium sized companies. The company writes options, but this is only a minor part of the operation compared to Djerriwarrh because the options market for small-caps is less developed. Administration costs were $2.2 million in 2015, less than Djerriwarrh, but because Mirrabooka operates the smallest portfolio of the LICs its MER was the highest.

Milton Corporation is by far the largest of the LICs with a $2.7 billion market cap and is also the oldest, having listed in 1958. It operates a diversified portfolio of 95 positions consisting mainly large-caps stocks. Last year administration cost were $3.4 million to manage a $2.75 billion portfolio, giving it the lowest MER.

Foolish takeaway

Overall, there appear to be good reasons to consider LICs as an alternative to index trackers. However, I would avoid buying shares in Djerriwarrh because it is trading at such a large premium to its NTA and recorded the weakest performance over the last ten years.

As a small-cap investor, my choice of the remaining three would definitely be Mirrabooka, as I believe it is no coincidence that it has delivered the best returns through investing in smaller stocks. Even so, I would only buy when its NTA per share is lower than its share price. Often LICs trade at significant discounts to their NTA during a recession, which is the best time to go shopping.

The post Why you should consider buying a Listed Investment Company appeared first on The Motley Fool Australia.

What many investors don't realise is that there are more LICs on the ASX than just Argo Investments Limited (ASX: ARG) and Australian Foundation Investment Co.Ltd (ASX: AFI) – the two largest LICs. According to the ASX, there are currently 65 LICs and Listed investment trusts (LITs).

The great thing for investors is that many of the LICs offer variety in the types of stocks they focus on, their investing strategies vary and in some cases, LICs can take both short and long positions, allowing them to benefit from downward moves as well as normal capital gains.

One example I own shares in is Contango Microcap Ltd (ASX: CTN). Currently sporting a fully-franked dividend yield of more than 8% and investing in smaller stocks with market caps of between $10 million and $350 million on the ASX gives me instant diversification with one security. Since inception in 2004, Contango has produced annualised returns of 16.4% before fees and taxes – well above the All Ordinaries Accumulation Index return of 9.4% (both include dividends).

Here's a closer look at 5 other LICs which are included in the S&P/ASX 200 (Indexasx: XJO) (ASX: XJO).

Milton Corporation Limited (ASX: MLT)

With a market cap of $2.9 billion, Milton is the third-largest listed LIC on the ASX behind AFIC ($6.7bn) and Argo ($5.3bn). All three sport ultra-low management fees of between 0.12% and 0.18% according to the ASX website. Milton is one of my favoured LICs, thanks to its low cost (0.12% in the year to June 2015), excellent management, a dividend every year since 1958, and returns of more than 10% annually over the past 10 years, beating the 7.8% from the index (both including dividends).

One thing to watch, as with all LICs, is the price compared to the last reported net tangible assets (NTA) per share. Milton had $4.39 in NTA per share at the end of June, below the current share price of $4.56, so investors might want to wait for a better entry price.

Djerriwarrh Investments Limited (ASX: DJW)

Djerriwarrh is one of those special LICs that 'soup's up its performance by selling options over part of its investment and trading portfolio, allowing the company to continue paying high dividend yields. Currently paying a 5.5% fully franked dividend yield, which grosses up to 7.9%, Djerriwarrh has paid a dividend yield of more than 5% over the past decade, but performance has suffered, with the LIC portfolio underperforming the S&P/ASX 200 Accumulation index. Another issue is that Djerriwarrh's shares consistently trade at a premium to its assets. Add in a management fee of more than double the top three (0.39%), and it's one LIC I'd be avoiding for now.

Diversified United Investment Limited (ASX: DUI) ('DUIL')

Diversified United Investment was founded in 1991 and has paid a dividend every year since listing in 1992/1993. The company currently pays a 4% fully franked dividend yield (grosses up to 5.7%) and its latest NTA per share at the end of June 2015 was $3.68. The current share price is $3.50 so is trading at a discount, although falls in July may have removed some of the discount. DUIL has very low operating costs – 0.07% in the latest half year. Interestingly, DUIL also invests in international exchange traded funds (ETFs), giving investors some exposure offshore – important when the Australian dollar has just dropped to its lowest level in six years. DUIL has outperformed the S&P/ASX 300 Accumulation index over the past 10 years, and its one LIC I'd be adding to the watchlist.

Mirrabooka Investments (ASX: MIR)

Like Djerriwarrh, Mirrabooka shares are trading at a massive premium to their underlying net tangible asset (NTA) backing per share. The current price is $2.65 compared to reported NTA of $2.29 at June 30, 2015, so this is no bargain. The good news is that the company has outperformed the S&P/ASX Mid cap 50 and Small Ordinaries Accumulation Indices over the medium to long-term (both including dividends reinvested).

One thing to also research when considering an LIC is to see which companies they invest in. Mirrabooka doesn't follow the usual path of following a major index and instead invests in a wide variety of medium-sized stocks. Its largest holding at the end of June 2015 was Qube Holdings Ltd (ASX: QUB).

Platinum Capital Limited (ASX: PMC)

Like many other LICs, Platinum trades at a substantial premium to its underlying assets. The main reason for that is its popularity – given the LIC has thrashed its index since inception in 1994. Platinum's fund has returned 13.3% per annum against the MSCI World Net Index of 6.8%. Platinum Capital invests around the world, with 39% of assets allocated to Asia, 23% to North America and the same to European companies. The LIC can also take short positions to juice up returns in falling markets.

It also helps that renowned fund manager Kerr Neilson is the driving force behind Platinum's performance, but the price for investors is a 1.5% management fee. All those factors need to be considered before building a stake in Platinum Capital.

Foolish takeaway

This review covers just 5 of the 65 listed investment companies on the ASX. For those looking for a quick and easy way to get into the market and instant diversification, LICs, including the ones mentioned above could be your best bet.

The post Beat the market with these 5 'lazy investor' stocks appeared first on The Motley Fool Australia.