24/01/2020 NTA: $1.2429/01/2020 Share Price: $1.095Discount =...

24/01/2020 NTA: $1.24
29/01/2020 Share Price: $1.095
Discount = 12%

Bell Potter 10 Jan 2020 LIC report NTA performance (3mnths, 6mnths, 1yr, 3yrs, 5yrs):
https://www.firstlinks.com.au/article/lic-reports-and-updates

- AEG is ahead of alternative space and killing market neutral competitors like ALF.

The last time the share price was $1.10 (End of Jan 2019) AEG's NTA was $1.05 - trading at a premium.

At 30 June 2019 NTA was ~$1.03. So at $1.24 plus 4c div already paid it is up over 24% this financial year (7 months).

The Bell Potter report indicates the all time discount low was 14.4% and the premium has been as high as 22.9%

I expect a fully franked dividend announced in late Feb of around 4 cents (double the prior interim div) as its stated dividend policy is to pay out all franking credits as noted in the 14 Nov 2019 Chairman's address:

"We have stated previously that it is the Board’s intention to efficiently pay out franking credits via fully franked dividends on a semi-annual basis, subject to the Company having adequate profit reserves to do so."

So if performance holds up till then I expect the run to the ex-div date to see the discount close to less than 7%, perhaps even better. Seems like a free 5% kick to my thinking.

Performance chasing is also likely to kick in at some stage if AEG starts getting noticed again as delivering 24% in 7 months from a market neutral strategy. Note the volatility of the monthly performance and this drives the discount/premium changes. Jan 2020 will be 5 to 6%.



And who knows perhaps the lazy clowns in charge of the buyback will be kicked into more intensive action before they have to pay out the big dividend?

Note I don't recommend holding the same level of exposure to AEG long-term but timing entry and exit can be lucrative.