The biggest and most obvious advantage I see for HML is that most of the options have already been exercised, and with the new GIGANTIC dividend announced for 30 June, this will force most of the remaining options to exercise.
This means no more option dilution going forwards.
BHD on the other hand will have all of its options active on a 1:1 basis.
By investing in BHD after the IPO you are essentially taking on 100% of the risk but only getting half the upside potential because of the dilution.
Furthermore these options don’t expire until 28 April 2020.
If the BHD performance is amazing from the get go, this dilution will come back to haunt investors that come in after the IPO, as half their gains will be flushed down the toilet.
This article does a great job of explaining Option Dilution with regards to new LICs,
https://www.linkedin.com/pulse/why-listed-investment-companies-perform-better-when-options-peters
HML also has some other great advantages over BHD:
- Cheaper management and performance fees.
- Has a longer trading history.
- Is more diversified.
- Massive 18-22c dividend for 30 June with potential DRP.
- The Hunter Hall play is starting to pick up traction allowing for massive profits.
- Once all options
disappear, potential for a gigantic premium to take effect.
Those that had their BHD applications scaled back would be wise to look at HML with that money over BHD.
I'm already aware of numerous other investors that feel the same way about all of this, but look forward to hearing some further debate.
DYOR, and best of luck with your investing.
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