Referring to The Edge Lipper Fund Table dated 15 Dec 14, there were 67 funds under the category of Equity Malaysia (non-Islamic). There is no other closed-end fund listed in Bursa at the moment. So I guess the closest comparison I can make is versus open-ended funds under this category.
For the 5 year period of 4 Dec 09 to 5 Dec 14
Icap share price as of 4 Dec 09: RM1.79
Icap share price as of 5 Dec 14: RM2.36
Adjusted Icap share price* as of 5 Dec 14: (2.4/2.3) x 2.36 = RM2.46
*(adjusted for 9.5 sen special dividend in Sep 13. Closing price on 13 September 2013, a trading day before ex for dividend: RM2.40)
Icapital.biz's 5-year share price return, inclusive special dividend: 37.4%. This ranked Icapital.biz 57/68, the bottom 20% among the fund. The share price return is what the investors get when they invest in the closed-end fund.
If we look at the NAV for the 5-year period from 2 Dec 09 to 3 Dec 14, (a differencce of 2 days as Icapital publishes the NAV value once a week), the return was 53.8%, which ranked the fund 35/68, in the bottom half.
NAV as of 2 Dec 09: RM1.97
NAV as of 3 Dec 14: RM2.96
Adjusted Icap NAV:2.96/288.875 x 2.96 = RM3.03
Icap's NAV growth in 5 years: 53.8%
The performance of the fund does not excite the shareholders, despite the chances of success for closed-end funds are much higher. According to Icapital.biz, closed-end funds do not experience inflows and outflows of funds, their fund managers have a broader range of investment choices and greater flexibility in deciding where and how to invest. Since closed-end funds have a fixed number of shares outstanding, they do not experience constant inflows and outflows of funds. Therefore, closed-end funds have less trading activities. With less buying and selling to do, closed-end fund would have less reinvestment decisions to make. The more reinvestment decisions there are, the higher the risks of making the wrong decisions and thus the higher the chances that the performance of a fund would be inferior.
Read more:
Does Icapital.biz outperform Berkshire Hathaway Inc.?
Did Icapital.biz outperform open-ended unit trusts?
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