Yes, CDM is an absolute disappointment but so are most other listed MF IMO.
The ARQ investment level was always a big question in my mind since CDM investment philosophy should have prevented the large holding. The naughty fund broke its own rules perhaps.
The initial investment in an individual stock however cannot exceed1% of the portfolio at cost. The Manager can further invest in a stock in 1% increments asthe stock trends up (for long positions) or down (for short positions) up to a maximum offour more times.
The CDM investment methodology does not suit the current environment, perhaps.
The Manager is not a forced seller, meaning that once 5% of the portfolioat cost has been invested, the Manager can let the stock continue to move up or down untilthe technical indicators suggest exiting the position, unlike other funds which have maximumholding limitations and have to sell down a stock to avoid breaching the limitations.
Long term it will be interesting to see how "naughty" CDM will go. I am down 18% since 2016, div inclusive, due to ongoing selling under the NTA by perhaps foolish shareholders. We are trading around a 30% discount to post tax NTA. I will keep adding, albeit small amounts, at these prices as long as the investment philosophy remains true.
Certainly the Cadence Opportunities fund that never listed has outperformed the market - up 19% in 3 months. This has a different investment philosophy, shorter term, and so far I am liking it!
CDM Price at posting:
74.5¢ Sentiment: Buy Disclosure: Held
A personalised tool to help users track selected stocks. Delivering real-time notifications on price updates, announcements, and performance stats on each to help make informed investment decisions.
(20min delay)