I just invested in ASX share PM Capital Global Opportunities Fund Ltd (ASX: PGF), which is a listed investment company (LIC).
As most readers will know, the job of a LIC is to invest in other shares on our behalf. There are plenty of LICs out there like MFF Capital Investments Ltd (ASX: MFF), Australian Foundation Investment Co.Ltd. (ASX: AFI) and WAM Research Limited (ASX: WAX).
Different LICs focus on different investments. There are lots of LICs that invest in ASX shares and there are a growing number of LICs that invest in global shares.
What does PM Capital Global Opportunities Fund invest in?
It generally invests in around 40 globally listed shares with both a regular and 'short' investment strategy. This particular LIC has been going since December 2013, though Paul Moore and PM Capital have been investing for many years.
The LIC looks for the small number of shares that are mispriced, then being patient and considered for the long-term with those opportunities.
Some of the themes that it's currently invested in are global domestic banking, copper, alternative investment managers and the post GFC property recovery in Europe. Some of its current holdings include Cairn Homes, Visa, Bank of America, Visa and KKR & Co.
How has it performed?
Its returns have been solid considering it hasn't focused heavily on technology. After fees, over the past year its net return was 30.3%, over the past three years it has made an average of 13.8% per annum and since inception the return has been 12.3%.
Considering 'value' managers are not meant to have done so well, PM Capital has done pretty well. It's only once this cycle has finished will we see how PM Capital performs against the global share market.
Does it pay a dividend?
It does. It doesn't have the biggest yield in the LIC industry at all, but the trailing grossed-up dividend yield is 4.3%.
PM Capital Global Opportunities Fund has increased its dividend each year since 2016. It doesn't have a long track record, but it has built up a large profit reserve.
Why I chose to invest
I'm always looking to buy good shares at good value prices. Nearly all of the really good shares are trading at all-time highs, so I'm cautious about buying shares at these expensive prices.
It's trading at a 13.5% discount to the net tangible asset (NTA) value at 3 January 2020, plus PM Capital believes the shares it's invested in are trading at a good price, so there's potentially a double discount here.
