European Assets Trust (EAT)

[OZYU]

This might be of interest, note the change of policy, from THREE equal divi instalments to FOUR.

The rest is no surprise and as expected. Highlights:

• Total dividends declared for 2018 will be Euro 0.88 per share (2017: Euro 0.7884) - an increase of 11.6%
• Sterling net asset value total return of 22.6 per cent over the year
• Continued policy of 6 per cent dividend on year-end net asset value per share for annual distribution to shareholders.
• Dividend to be paid in four equal instalments in January, April, July and October. Previously the Company paid its dividends in three equal instalments. This change to the distribution policy is effective immediately.

http://www.londonstockexchange.com/exch ... 86229.html

Ozyu

We hold.

[TahiPanasDua]

A target dividend of 6% could normally only be achieved by paying partly out of capital which I see they do. That's not necessarily a bad thing but I personally prefer my income to be company distributed dividends only.

Also, 6% seems well over the Safe Withdrawal Rate (SWR) which I have never seen quoted above 4%. I don't know how that would work but then again, I'm no expert. The small to medium companies aspect could mean larger capital losses in a down market.

Not my scene but it's a matter of personal choice.

TP2.

[forrado]

Also, 6% seems well over the Safe Withdrawal Rate (SWR) which I have never seen quoted above 4%. I don't know how that would work but then again, I'm no expert. The small to medium companies aspect could mean larger capital losses in a down market.
Not my scene but it's a matter of personal choice.

A timely warning about the hidden dangers associated with the way this IT operates. Definitely comes with a handle with care sticker. While I would argue that EAT could have a role to play in an income investor’s portfolio, as has proved to have been to be the case over the past six years or so, the size and weight of such a role should not be large enough to do any lasting damage should things decide to go pear-shaped.

The decision to switch from three to four payouts a year is a direct result of EAT’s increasing popularity with retail investors. In the past six years, when I first got involved with this trust, the market cap value has gone from £180-million to currently £463-million thanks to good stock picking in buoyant markets supported by a stream of fund raising tap issues along the way.

While EAT’s shareholders have enjoyed the ride for the past 6 years, not an IT to get heavily involved in for reasons that "TahiPanasDua" as outlined above.

[richfool]

Without meaning to highjack this thread about EAT (which I hold), (and) noting the points being made about the capital value being more susceptible to market falls, because it is subsidising the income, I wonder how much of an issue this might be?

I raise the question because I am conscious that a number of IT's adopt a similar strategy, including JPGI (JP Morgan Global Growth & Income) and JAI (JP Morgan Asian Income) trusts, both of which I also hold. Both also pay a higher dividend income, subsidised from capital. I hold these because I like the idea that they increase my dividend income and also give me exposure to a different type of stock than a normal income fund or trust would. For example, in the case of JPGI it tends to hold more growth stocks and technology stocks.

Therefore, whilst I am somewhat wary of what might happen when markets fall, to date I have taken the view that I would ride-out any "undulations" in the SP (in the event of market falls). All the above trusts have given very good upside, as well as the enhanced income, along the way.

[shawsdale]

I also hold European Assets (EAT) for the reasons set out by 'richfool' as I'm at a stage in life where income is the priority.

So long as it (and other such trusts) are seen as a complement to other investments then the kind of capital value issues EAT encountered in 2016 can be ridden out. It's worth noting that over 1 year to 5th Jan 2018 the narrowing of EAT's discount in 2017 saw a capital only return of 28%, against 14% for one of the major European Income OEICS, Schroder European Alpha Income (Z Inc unhedged version). Over 5 years EAT's share price has risen by 86% against 95% for the Schroder fund.

EAT's performance in capital terms is significantly below a fellow member of the IT European Smaller Companies sector, JP Morgan Euro Smaller Companies (JESC), the capital value of which has grown by 45% over 1 year, and 188% over 5 years, but the dividend yield on JESC is just over 1%. Some might argue for investing in more growth focused vehicles like JESC and taking income out of capital oneself as required, but I'm not keen on having to make that extra set of market timing decisions of when to sell part of my holdings, although I'd be interested in hearing from anyone who operates in that fashion.

Another issue with EAT is the fluctuation of the dividend payment in sterling given that the dividend is fixed in Euros at the start of each year. That can work both ways, of course...

[chevin]

Could anybody please tell me what the actual, sterling, dividend was for January? I may be missing something, but I can't find anywhere what EAT has actually paid out in sterling (including no indication what exchange rate they've used). Thanks in anticipation!

[flint]

Chevin : Could anybody please tell me what the actual, sterling, dividend was for January? I may be missing something, but I can't find anywhere what EAT has actually paid out in sterling (including no indication what exchange rate they've used). Thanks in anticipation![/quote]

According to Morningstar 19.5238p.

HTH

Jon

[mc2fool]

Could anybody please tell me what the actual, sterling, dividend was for January? I may be missing something, but I can't find anywhere what EAT has actually paid out in sterling (including no indication what exchange rate they've used). Thanks in anticipation!

The first result from a google search for European Assets Trust (after the ads) is....

https://www.fandc.com/uk/private-investors/investment-trusts/european-assets-trust/

Then click on Dividends

[tramrider]

Could anybody please tell me what the actual, sterling, dividend was for January? I may be missing something, but I can't find anywhere what EAT has actually paid out in sterling (including no indication what exchange rate they've used). Thanks in anticipation!

On my EAT holding, the dividend was 22 eurocents which was paid as 19.1250p per share, received on 31st January.

Tramrider

[chevin]

Thank you all. As your posts kindly showed, I was missing something!

[Arborbridge]

I think I am correct in saying that OZYU bought this when it was at a cracking discount - possibly after the last market crash.

If so, I wonder if he would be buying it now, when the risk is certainly higher? I didn't particularly like the concept of paying from capital, but I'm getting so ancient, I see my pension drawdown indicators tell me it doesn't matter much!

4%? Pah! well over double that, then I'm a gonner in good time, it seems.


Arb.

[monabri]

I have a small holding of EAT in my HYP+IT p/f. I received this notice this morning. Any views (especially about the increase qty of shares - see underlining below)?

Corporate Action – European Assets Trust NV – Subdivision
In response to shareholder comment and to improve marketability, the Company will seek approval at the forthcoming General Meeting to undertake a stock split. If approved, with effect from 3 May 2018 each shareholder will receive ten shares for every one share held. The quarterly dividends payable on 31 July and 31 October 2018 would be adjusted commensurately from €0.22 to €0.022 per share.
Each share will have a nominal value of €0.10 in comparison to the current nominal value of €0.46 with the resulting obligation to increase share capital by €0.54 for every ten shares met by an accounting adjustment to the share premium reserve of the Company.
The Company will seek further shareholder approval to increase, with effect from 3 May 2018 the authorised share capital of the Company from 50,000,000 shares at €0.46 per share to 600,000,000 shares at €0.10 per share. This is proposed in the anticipation of continued share issuance by the Company through the provisions of the Liquidity Enhancement Agreement.

The Company's General Meeting will be held at 12 noon on 18 April 2018 at the Company's Office at Weena 210-212, Rotterdam, the Netherlands.
Terms: Each Existing Ordinary Share of 5p will be split into 5 New Ordinary Shares of 1p each
On the above your account will be credited with a new holding of XXXX (redacted!! ) shares.

The New Shares are expected to be credited on 3 May 2018.
Following the Subdivision, Shareholders will still hold the same proportion of The Company`s Ordinary Share Capital as before the Subdivision (except in respect of fractional entitlements). The share price will decrease at the same ratio (plus or less any market movement) to reflect the Subdivision.
With this being a new line, when the new shares are credited any limit orders with cease to be valid and you will need to add a new limit on the new line.

[doug2500]

I must admit to not really understanding the relevance of the underlined bit. I think it's maybe to do with share issuance to control any premium. I'm sure someone will be along soon to clarify.

On the 10 for one split though, I'll be voting against. Increasing liquidity just sounds like crap to me. None of us are stupid enough to think this makes a difference (maybe for BRK A it would ) I just think it's financial jiggerypokerry, just get on with running the trust.

[GrahamPlatt]

Hello folks,

I am thinking of buying in here, but the Broker’s fees for holding an IT are of the order of 1.1%pa. Is this about the going rate or does anyone have suggestions as to how to reduce this?

[SalvorHardin]

I am thinking of buying in here, but the Broker’s fees for holding an IT are of the order of 1.1%pa. Is this about the going rate or does anyone have suggestions as to how to reduce this?

I hold mine though F&C's monthly savings plan. The annual cost to operate the plan is £48 regardless of how many investment trusts from the F&C stable you hold through the plan.

https://www.fandc.com/uk/private-invest ... stor-plan/

Alternatively buy the shares through a broker, or directly from F&C, and request a certificate. Brokers will charge a one-off fee for the certificate but after that the holding cost is a lovely 0% per annum. Most of my investment trust holdings are certificated or monthly savings plan.

[richfool]

Hello folks,

I am thinking of buying in here, but the Broker’s fees for holding an IT are of the order of 1.1%pa. Is this about the going rate or does anyone have suggestions as to how to reduce this?

Maybe look for a different broker. IT's are effectively company shares for which my broker charges £5.95 per trade. I appreciate EAT is domiciled in the Netherlands, though traded on London SE. I am still only charged £5.95.

Something is going on re the split of shares currently, as my ISA is showing some red exclamation marks against my holding of EAT today.

[mc2fool]

I am thinking of buying in here, but the Broker’s fees for holding an IT are of the order of 1.1%pa. Is this about the going rate ...

No, and I rather suspect you've misread/misunderstood your broker's fee structure, 'cos if it's correct then it's outrageous and by far the highest I've ever heard of. Who is your broker?

[OZYU]

As an aside, holders of EAT please note that your price has not taken a dive today, it is going for a 10 for 1 share split.

My wife just made her contribution in her ISA online, and while logged in (a rare event for her) she noticed she was down by £thousands on EAT.

I just pointed out that they had the correct reduced SP, but had not yet changed her holding size by the factor of 10, which they will presumably get round to eventually, probably as a batch job overnight!

About the OP, ITs are just normally charged same as shares, if not change your broker.

Ozyu

[doug2500]

It cost me nothing to hold IT's too, so change your broker.

I'd love to know how much time and effort has gone on the split, and more importantly how much it's cost. And what has it achieved?

The only minor benefit I can think of is dividend reinvestment will have less left over 'change' and more reinvested.