Fundsmith Emerging (FEET) - Crazy idea?

[doug2500]

I'm getting a bit annoyed now. It's preventing me actioning some CGT harvesting in case a payout suddenly appears where the holding has been kicked out of an ISA, or never was.

An update should be the bare minimum at this stage.

[Lootman]

I'm getting a bit annoyed now. It's preventing me actioning some CGT harvesting in case a payout suddenly appears where the holding has been kicked out of an ISA, or never was.

An update should be the bare minimum at this stage.

But would CGT apply? Didn't that all happen within your ISA and then it was just a cash liability that was transferred out? That is how I plan to treat it.

But yes if I had known it would be all this faff I would have sold in late 2022.

[terminal7]

Indeed Lootman - the opportunity cost of not having taken the cash in late 2022 within an ISA is now 4%+ - and now I need to take a slug out for unexpected building repairs and will be forced to sell some funds unless this comes through within the next 6 weeks or so.

T7

[doug2500]

I may treat it that way, but I suspect it's wrong. What we now have is a holding in an unlisted company in a GIA until it is formally wound up, it's not really the same as a cash withdrawal from an ISA. Getting advice would cost more than the payout so it's a bit catch 22.

One holding was always in a GIA so my point still stands on that.

[doug2500]

I missed this update from January:

https://www.feetplc.co.uk/

Gist of it is that they hope for final distribution of around 15p by 30/04/24 but no guarantees on timing or value.

That would be a return of 12.85 from a closing NAV of 13.03, due to exchange rates. I thought the cost of winding up would also have to paid from NAV though?

[terminal7]

Third and final cash distribution to shareholders has been 'promised' for April 2024 - let's hope that this liquidation will be finally wrapped up.

T7

[RajK]

22 March 2024

As detailed in the Joint Liquidators’ annual progress report, the timing of the third and final distribution to shareholders and the conclusion of the liquidation is largely dependent on resolution of the Company’s tax affairs in India, where the revenue authority have raised an assessment into the Company’s tax filing for the year ended 31 March 2023. The Joint Liquidators have filed an appeal against the assessment on behalf of the Company and the Company’s tax advisors are liaising with the Indian revenue authority to attempt to resolve the matter as soon as possible.

It was anticipated that the third distribution to shareholders could be made by 30 April 2024. Unfortunately, due to the ongoing Indian tax assessment, it will now not be possible to make payment of the third distribution by 30 April 2024. The Joint Liquidators and the Company’s tax advisors will continue to try and resolve this matter expeditiously and, assuming that the appeal is accepted by the revenue authorities by 30 April 2024, anticipate that the final distribution can be paid by 31 May 2024.

A further update on the time of the third distribution will be provided on or around 30 April 2024.

[terminal7]

A week to go!

T7

[doug2500]

Is it just me, or is there nothing yet?

[simoan]

Is it just me, or is there nothing yet?

I got a message from my broker saying the final payment has been delayed until June due to the Indian tax issue.

[monabri]

Has anyone calculated their return on their investment here ( XIRR)? I'm just curious as to whether it was worth it?

[simoan]

Has anyone calculated their return on their investment here ( XIRR)? I'm just curious as to whether it was worth it?

That’s a no and no from me. Definitely not worth it when you take the time value of money into account. Yet another lesson that no matter how experienced you are, investing is a constant learning exercise.

[simoan]

Has anyone calculated their return on their investment here ( XIRR)? I'm just curious as to whether it was worth it?

That’s a no and no from me. Definitely not worth it when you take the time value of money into account. Yet another lesson that no matter how experienced you are, investing is a constant learning exercise.

Actually, please ignore my outburst above. That was my frustration at the length of time the full liquidation is taking, venting its spleen. Now I have my spreadsheet in front of me, on a XIRR basis my return was more than acceptable given that 96% (£12.40 per share) of the fund was returned within 6 months of starting to build my position in the summer of 2022 with buy prices between £10.97 and £12.24.

Given what was happening elsewhere in the UK market at the end of 2022 (Truss-onomics in full effect), on a risk/reward basis I am very happy with the outcome, despite the frustration at the length of time full liquidation has taken. However, I really should have made a bigger gain and sold out when the price went up over £13 prior to the delisting. That's the big lesson for me in future i.e. sell in the market once the discount to NAV has narrowed significantly.

All the best, Si

[jaizan]

That's the big lesson for me in future i.e. sell in the market once the discount to NAV has narrowed significantly

I reached the same conclusion. Although if enough other people conclude the same, it means the result might be different next time.

[simoan]

That's the big lesson for me in future i.e. sell in the market once the discount to NAV has narrowed significantly

I reached the same conclusion. Although if enough other people conclude the same, it means the result might be different next time.

There will always be large institutions that will arbitrage the price to keep it within sight of the NAV. In the case of FEET there were significant holdings from funds that specialised in just that and they can't easily offload without moving the price against themselves. The frustration for me is that I sold a third of my holding at £13.06 when I should have sold the lot and moved on prior to delisting. You live and learn.