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Smithson: new Fundsmith Investment Trust to launch

Closed-end funds and OEICs
Lootman
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Re: Smithson: new Fundsmith Investment Trust to launch

#167492

Postby Lootman » September 19th, 2018, 4:14 pm

FredBloggs wrote:
Dod101 wrote:I have just applied via ATS. It seems to have worked like clockwork. I also have an account with II but having read the above I did not even try.

I would imagine it will be very popular so I hope I do not get scaled back.

I am expecting early closure. Less fuss and work for them than a scale down, IMO.

Who would close it early? The broker, the underwriter or the issuer?

Seems to me the issuer would more likely either scale back the allocations (to ensure a broader investor base) or increase the size of the issue (as long as they believe they can invest it successfully).

The managers get paid as a percentage of AUM, and a larger pool of funds is no more work to manage than a small one.

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Re: Smithson: new Fundsmith Investment Trust to launch

#167515

Postby portf » September 19th, 2018, 5:27 pm

The issuer I presume?

Timetable, Prospectus, KID and other stuff all at the link below.

hl.co.uk/shares/ipos-and-new-issues/smithson-investment-trust#

Extract re the £250m float potentially rising upto £350m :

Prospectus, Page 58

The Company is targeting raising £250 million through the Initial Issue. The total number of Ordinary Shares issued under the Initial Issue will be determined by the Company, Investec and the Investment Manager after taking into account demand for the Ordinary Shares, subject to a maximum of 35 million Ordinary Shares being issued under the Initial Issue in aggregate

Prospectus, Page 59

The Directors are authorised to issue up to 35 million Ordinary Shares pursuant to the Initial Issue. To the extent that applications under the Offer for Subscription and Intermediaries Offer and commitments under the Initial Placing exceed 35 million Ordinary Shares, the Company reserves the right, at its sole discretion, but following agreement with Investec, to scale back applications in such amounts as it considers appropriate. The Company reserves the right to decline in whole or in part any application for Ordinary Shares pursuant to the Initial Issue. Accordingly, applicants for Ordinary Shares may, in certain circumstances, not be allotted the number of Ordinary Shares for which they have applied.

The Company will notify investors of the number of Ordinary Shares in respect of which their application has been successful and the results of the Initial Issue will be announced by the Company on or around 16 October 2018 via an RIS announcement.

Lootman
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Re: Smithson: new Fundsmith Investment Trust to launch

#167518

Postby Lootman » September 19th, 2018, 5:37 pm

portf wrote: "the Company reserves the right, at its sole discretion, but following agreement with Investec, to scale back applications in such amounts as it considers appropriate. The Company reserves the right to decline in whole or in part any application for Ordinary Shares pursuant to the Initial Issue. Accordingly, applicants for Ordinary Shares may, in certain circumstances, not be allotted the number of Ordinary Shares for which they have applied.

Exactly. The issue will scale back allocations. It says nothing about "closing the offer early".

In fact brokers may only send in the application in a batch close to the end date of the offer, rather than submit them in dribs and drabs. It should not matter how early or late someone applies and it can be better to wait in case of market dislocations (remember the ill-fated BP privatisation?).

So I don't think early closure is a risk. Only that if you ask for a lot of shares you probably will only get a fraction of that, as routinely happened with privatisations issues, which were much more of a sure thing than this is.

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Re: Smithson: new Fundsmith Investment Trust to launch

#167528

Postby portf » September 19th, 2018, 6:34 pm

itinvestor.co.uk/2018/09/10-things-you-should-know-about-smithson-investment-trust/

Interesting write up.
Sorry - I don’t have permission to post links yet!

WorldCupWilly
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Re: Smithson: new Fundsmith Investment Trust to launch

#168569

Postby WorldCupWilly » September 24th, 2018, 12:08 pm

Thanks portf - good link worth reading.

I've applied through my HL and AJ Bell accounts and if successful will have about 15% of my portfolio in this one. I have big FEF and small FEET stakes and like the ex-GS guys who'll manage SSON, I have confidence in Terry's (relatively) simple formula. The fact that he's back-tested his portfolios against the dotcom bust and financial crisis and FEF would have been up 12% (v FTSE -50%) after the first and down 12% (v FTSE -46%) for the second and that FEF's Sortino ratio is 1.48 (v 0.64 for its benchmark MSCI World) reassures me that he's following Buffet's nugget that "You only find out who is swimming naked when the tide goes out". I know this may be confirmation bias, but I'm definitely backing him.

WCW

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Re: Smithson: new Fundsmith Investment Trust to launch

#168579

Postby smicker » September 24th, 2018, 12:30 pm

I'm reading through various articles etc to understand the charging structure. In the prospectus they mention an investment Manager charge of 1/365 *0.9 % of the market cap per day to fundsmith LLP. Is this in addition to the 1.25 % of recurring costs mentioned in the KID or is it contained within them? I just want to check if im paying 2 sets of management fees here.

Alaric
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Re: Smithson: new Fundsmith Investment Trust to launch

#168584

Postby Alaric » September 24th, 2018, 1:00 pm

smicker wrote:. Is this in addition to the 1.25 % of recurring costs mentioned in the KID or is it contained within them?


The costs quoted in the KID are meant to be inclusive.

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Re: Smithson: new Fundsmith Investment Trust to launch

#168640

Postby smicker » September 24th, 2018, 3:49 pm

I just wondered if the 1/365 * 0.9 was a "hidden" management cost which is not paid directly by me, but is money taken from the fund itself, thereby reducing the NAV , and should be taken into account. Does Fundsmith itself have the same cost?

Alaric
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Re: Smithson: new Fundsmith Investment Trust to launch

#168663

Postby Alaric » September 24th, 2018, 6:02 pm

smicker wrote:I just wondered if the 1/365 * 0.9 was a "hidden" management cost which is not paid directly by me,


Investors in ITs don't pay any direct costs, it's all in the fund assets.

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Re: Smithson: new Fundsmith Investment Trust to launch

#168666

Postby Lootman » September 24th, 2018, 6:16 pm

Alaric wrote:
smicker wrote:I just wondered if the 1/365 * 0.9 was a "hidden" management cost which is not paid directly by me,

Investors in ITs don't pay any direct costs, it's all in the fund assets.

Yes, the way I read those numbers were that the total expense taken from the fund is 125 basis points a year, of which 90 basis points is the management fee i.e. the income to the managers.

That said, when I looked at the listing terms I thought I had read that the management fee was 110 basis points. Might the lower 90 bp number be if the fund size is enlarged to 350 million, which seems likely will happen?

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Re: Smithson: new Fundsmith Investment Trust to launch

#168706

Postby smicker » September 24th, 2018, 10:42 pm

Alaric,
Thank you for the clarification

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Re: Smithson: new Fundsmith Investment Trust to launch

#170335

Postby westmoreland » September 30th, 2018, 8:28 pm

never subscribed to an IPO before - does anyone know if the longer you leave it, the less likely you will get an allocation, or is just they allocate a fixed percentage if oversubscribed? i'm aware it closes on 12 Oct.

Alaric
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Re: Smithson: new Fundsmith Investment Trust to launch

#170349

Postby Alaric » September 30th, 2018, 9:36 pm

westmoreland wrote:does anyone know if the longer you leave it, the less likely you will get an allocation, or is just they allocate a fixed percentage if oversubscribed?


It was suggested that it might be closed early, but the more likely approach is to scale back applications. I think there's some flexibility in that additional shares can be issued if the original targets are exceeded.

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Re: Smithson: new Fundsmith Investment Trust to launch

#172519

Postby simoan » October 9th, 2018, 11:44 am

Looks like the Smithson IPO was massively oversubscribed, so RNS today stating up to 35 million more shares could be issued to meet demand:

https://www.investegate.co.uk/smithson- ... 00103491D/

Assuming that Issue Proceeds of £600 million are received, the Investment Manager now expects to be able to deploy 92 per cent. of the Issue Proceeds within 7 business days (with the balance being fully invested within 22 business days of Admission).

So they are going to deploy 92% of £600m in 7 days. Hopefully, that will be positive for the Fevertree shares I bought first thing today :-)

All the best, Si

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Re: Smithson: new Fundsmith Investment Trust to launch

#172545

Postby doug2500 » October 9th, 2018, 12:52 pm

Well I can't say I'm surprised at all. WPCT got 800m IIRC so I always thought this would exceed the 250m and possibly the 350m limit.

Might subdue the secondary market a bit.

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Re: Smithson: new Fundsmith Investment Trust to launch

#172564

Postby WorldCupWilly » October 9th, 2018, 1:54 pm

simoan wrote:Looks like the Smithson IPO was massively oversubscribed, so RNS today stating up to 35 million more shares could be issued to meet demand:


Dear WCW,

Thank you for applying to subscribe for shares in our new small and mid-cap Investment Trust, Smithson.

The demand for Smithson has been far higher than anticipated and so, to avoid having to scale investors back, we will be increasing the amount that we are looking to raise from £250m to £600m.

To do this we are required to issue a Supplementary Prospectus for Smithson which can be viewed here:

https://smithson.co.uk/docs/default-source/smithson-prospectus/supplementary-prospectus.pdf?sfvrsn=4

Investors who have already applied for Smithson shares are entitled to withdraw their application should they wish to. Instructions to do so can be found in the Supplementary Prospectus, the deadline for withdrawals is 12th October.

The retail share offer will close at 1pm on Friday 12th October 2018.

Kind regards,

Greville




Grev Ward

Fundsmith LLP

33 Cavendish Square, London, W1G 0PW



WCW

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Re: Smithson: new Fundsmith Investment Trust to launch

#172625

Postby ADrunkenMarcus » October 9th, 2018, 7:36 pm

I'll be happy if I am NOT scaled back. :-)

Best wishes

Mark.

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Re: Smithson: new Fundsmith Investment Trust to launch

#173021

Postby doug2500 » October 11th, 2018, 2:24 pm

Might be great timing from Terry. I bet he's glad to be investing all that money next week rather than last week :lol:

I'm sure he would still prefer some sort of stability before deploying 600M though. I know he doesn't market time but putting that much to work in these conditions must make them at least a tad uncomfortable?

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Re: Smithson: new Fundsmith Investment Trust to launch

#173682

Postby westmoreland » October 14th, 2018, 1:37 pm

i decided not to follow through - the original fundraising target has been more than doubled (so i can't see it trading at a significant premium). if it falls a bit in the coming months i may buy a small position, but for now i'll just top up my current fund smith holding.

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Re: Smithson: new Fundsmith Investment Trust to launch

#174311

Postby simoan » October 17th, 2018, 7:40 am

Hmmm.... So offer now extended to 82m shares up from 60m to avoid scaling back. Who said the bull market was dead? I'm not sure how I feel about this tbh. I think I'd rather have been scaled back and to see a stronger after market.

https://www.investegate.co.uk/smithson- ... 00052685E/

Si


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