Cap gains for Granduer Peaks fund GPMCX

Derf

I came across estimate last week, here at MFO, & thought someone else would ask this question ,but to no avail.
So I'll lay it out & see if I can get any answers. Why would this fund with so little aum, $28 million (?) be giving distribution of $.1625 from a micro cap fund. I believe most of their other funds distribution were (0) or less than $.1625 by quite a lot.
I realize these are estimates only.

Happy investing,
Derf

LLJB

I don't think it matters whether they have a lot of AUM or a little, the percent of AUM is more relevant. One-third of the distribution is income and they apparently took net gains equal to roughly 1% of AUM this year for a total distribution of roughly 1.5%. I don't think that's particularly surprising, especially considering they were still getting original cash invested at the end of last year, probably took advantage of some of the low prices early in the year and must have taken some of those gains.

msf

I agree that it's percentages that matter, not absolute numbers.

It looks like the fund has taken in almost no money in the past six months (thus failing to broaden the base receiving those early realized gains).

AUM at the end of April was $30.735M @$10.38/sh; currently it is $32.5M (5.7% increase) @ $10.90 (5.0%), showing that virtually all the increase in AUM came from appreciation, not inflows.

(Current data as of 11/28/16 from M*; April 30 data from annual report.)

Two things that strike me as curious, since Derf is pointing out oddities:
- 1/3 of distribution coming from income; I thought microcaps don't often generate dividends;
- Despite having no inflows and just modest appreciation, the fund will have a hard close at the end of this year (prospectus)

Derf

@msf: A big yes to the 1/3 distribution coming from income. I believe if you set up auto deposits you can add after this year. Maybe I'm wrong or there has been a change
Derf

LLJB

I think I read a Matthews Asia commentary recently that said dividends are more common for small Asian companies and GPMCX has half their investments in Asia.

For all intents and purposes the fund was hard closed before it opened. You had to 'apply' to invest at inception and GP allocated the $25MM or so they were willing to take to those who applied. After that existing investors were able to add $6K per year and they increased that to $6500 a few months ago. I'm not sure why the prospectus says the fund will hard close at the end of this year because previous ones said it was officially hard closed at the end of 2015 but regardless... it was never really open.

msf

@LLJB - thanks for the info. Obviously I follow closely neither small Asian companies nor GPMCX. Still a curious fund.

Derf

Thanks LLJB for your input.
Derf