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Closed-end fund IRL

YBB just turned me on to this link. And I just looked. IRL.
Many years ago, pre-divorce, I was in this CEF and got out with a small profit. The discount is not as high as it might be, compared to the past year's average statistic, but the distribution rate is quite good. The Republic of Ireland remains in the EU. Cross-border crap with Northern Ireland is still being worked out, post-Brexit. I dunno if they'll ever find an answer to THAT one, apart from recognizing all the time and effort that's gone into regularizing relations between Stormont and Dublin. They both continue, of course, to use separate currencies.

https://www.cefconnect.com/fund/IRL

Comments

  • As long as you're comfortable with the fact that 33% of the fund's portfolio is in these two stocks--CRH,19.41%, and Flutter Entertainment,13.82%--then it could be an interesting play.
  • edited November 21
    Thank you, @LewisBraham. Quite concentrated, to say the least. Whoa. I keep seeing and mentioning items here, and I'm glad people who know better than me continue to point out some key facts.
  • edited November 21
    This chapter on CEFs of the ICI Factbook shows that CEFs are a rather tiny segment of funds - there were 494 CEFs with total AUM of $279 billion only as of 12/2020. They are the oldest form of funds that have existed since late 1800s but are rather complex in structure and never caught on with the masses. About 38% are equity CEFs and 62% bond CEFs. Mutual funds (OEFs) came along in late 1920s and ETFs in early 1990s. https://www.icifactbook.org/21_fb_ch5.html

    Ireland IRL is quite concentrated, not leveraged, has a high ER of 1.96% (0.65% for management is OK but 1.31% "other" is high considering that there is no leverage), has high distribution due to managed-distribution policy (many CEFs do) but its large discount has persisted. One has to know more about Ireland, N Ireland, UK and EU to be exposed to IRL. Strong dollar also cuts into the return for the US investors.
  • msf
    edited November 22
    The ICI has a somewhat provincial perspective when it comes to fund history. Though its fund timeline does start with Adriaan van Ketwich's 1774 pooled investment vehicle the Eendragt Maakt Magt ("unity creates strength") trust, the ICI can't seem to acknowledge that this was a CEF. Rather, it gives the 1868 creation of the Foreign and Colonial Government Trust as the precursor to the US fund model.
    https://www.icifactbook.org/21_fb_app_b.html

    While this was the first fund in an Anglo-Saxon country, the Dutch fund came nearly a century earlier.
    K. Geert Rouwenhorst (Yale School of Management), The Origin of Mutual Funds

    In footnote 6, that paper adds that there was an even earlier (1773) plan for a similar vehicle, but it's not known whether it was ever actually launched.

    The ICI timeline goes on to give 1924 as the date of the first mutual funds in Boston. The Massachusetts Investors Trust was started in 1924. It seems that whatever other 1924 funds the ICI has in mind didn't survive, as the Putnam Investors Fund (1925) is often given as the second oldest surviving "modern" fund.

    Whether CEFs ever "caught on" is somewhat subjective, but consider:
    A "veritable epidemic of investment trusts afflicted the Nation" before the Stock Market Crash of 1929. By 1924, over $27 million had been invested in investment companies, up from less than $15 million in the prior year. In 1925, investment trusts holdings double to $150 million. Some 140 investment companies were formed between 1921 and 1926. A new investment company was being created every other day in 1928. "[B]y 1929 they were being created at the rate of almost one a day." The assets of investment companies rose to over $1 billion in 1928. Another $2.1 billion was added in 1929. Between those two years, the number of investment company shareholders increased from 55,000 to over 500,000.

    Almost all of these enterprises were "closed-end" investment companies that invested in securities rather than producing a product or service.
    Copious footnotes omitted. Jerry W. Markham, Mutual Fund Scandals - Comparative Analysis of the Role of Corporate Governance in the Regulation of Collective Investments, Hastings Business Law Journal, Volume 3, Number 1 (Fall 2006).

    Similarly, the late Harold Bierman Jr, Distinguished Professor Emeritus of Management and Finance at Cornell, wrote that "By 1929, investment trusts were very popular with investors. These trusts were the 1929 version of closed-end mutual funds."
    https://eh.net/encyclopedia/the-1929-stock-market-crash/
  • @msf, great info. You may want to write to ICI.org. After all, it is a fund industry trade association led by fund industry leaders, economists, historians, lawyers.
    ICI Board & Leadership https://www.ici.org/board-and-leadership
    ICI Experts https://www.ici.org/ici-experts
  • Thanks for the suggestion. I'll work up something to send the ICI, and we'll see if they might broaden their horizons.
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