Click here for Part 2.Click to enlarge
The Asia Tigers Fund (NYSE:GRR) is a closed-end fund that invests in Asian equities. With an NAV of $13.56 and market price of $12.78, it trades at a discount of over 5%. The 1-year NAV return has been over 14%. The distribution yield is over 21%. That distribution is almost entirely capital gains. It traded ex dividend on December 19, 2012. It is managed by Aberdeen Asset Management Asia. This is a very small fund -- total net assets of November 30, 2012 were $55 million. Portfolio turnover is high, coming in at over 40%. Management fees run at about 1% and the expense ratio is over 2%.
In terms of the portfolio, top sectors include financials, industrials, and technology. Top holdings include Oversea-Chinese Banking Corp, Jardine Strategic Holdings, and Taiwan Semi. One could invest in the iShares MSCI Pacific ex Japan ETF (NYSEARCA:EPP) for a correlated fund with a lower expense ratio and more liquidity.
So why GRR? In the worst kept secret since you read the title of this article, GRR semi-annually repurchases up to 5% of their outstanding shares. Larger holders are prorated, but holders of 99 or fewer shares are not. So, one could buy 99 shares for a total of about $1,265.22. Tender them into the next buyback for a total gain of around $50.37. One can execute this twice a year for a total of over $100 for around an 8% yield. Not a lot of dollars, but I also pick up coins on the street and it seems to add up over time.
Disclosure: The author is long GRR. The author wrote this article themselves, and it expresses their own opinions. The author is not receiving compensation for it (other than from Seeking Alpha). The author has no business relationship with any company whose stock is mentioned in this article.
Additional disclosure: Chris DeMuth Jr is a portfolio manager at Rangeley Capital. Rangeley invests with a margin of safety by buying securities at deep discounts to their intrinsic value and unlocking that value through corporate events. In order to maximize total returns for our investors, we reserve the right to make investment decisions regarding any security without further notification except where such notification is required by law.