How low will this go

[gavin50]

This share seems to be at buy at this level or am I missing something

[SimonPB]

it'll track the rand

[Siener]

I pity the investors that got sucked into this turkey. They've lost a large part of their capital in just a few months. And it's done WAY worse than the Rand. YTD, the Rand has strengthened only about 8%, while Astoria has plunged almost 22%. In theory, it should track the underlying Rand performance of the overseas shares it invests in, less the management fees charged by Astoria. Judging by the no-brainer big name shares they've invested in so far (which many other, much less costly ETF's will give you exposure too as well, or better yet, you can just invest in them directly), this is an expensive trap for uneducated retail investors. In short - stay well clear of this one.

[Siener]

Oh, and to make matters worse, investment holding companies, especially where there's no obvious 'edge', normally trades at a discount (anything from 5% to 25%) to its underlying investments. And judging from their stock picks thus far, it seems Astoria has zero edge. Strictly for suckers only...

[SimonPB]

Siener, not much you have got right on this one .. they have not 'lost' a large part of their capital (importantly permanent capital which is a good game if you can get it) .. you say they down 22% against 8% on the rand but that mostly as they got way way ahead of the rand trading some 15% above nav at one point .. if you bought at NAV you down slightly more than rand .. they not much like an ETF at all, think the FANGs, this is the point of active management, and only 60% goes into individual stocks (sure one can do ones own portfolio, but does one have the skill set?) .. an yes you can diss active, but that another story .. they will also put 20% into private equity which the average person can not an another 20% active into funds .. an so on .. you may not like it, but at least be accurate about it ..

however the real Q is why didn't you see all this and alert us back when they listed ??

[THRESHOLD]

I love these kinds of companies.You wait until (hopefully) they are so out of favour that they are trading at a huge discount to their NAV - then you feast! AND WAIT...

[Siener]

I've checked their investments thus far as per latest set of results. Apple, Amazon, Admiral Group, Daimler,Facebook, Walt Disney, Unilever, Johnson & Johnson, Pandora A/S and Nike. Really? You want to pay a management fee for that!? You can get almost exactly the same exposure via DBX World or other overseas ETFs at much cheaper fees. Sure, they've mentioned their intention to limit the above type stock selection to 60%, but so far I'm unimpressed. In theory, 60% of their fees are for 'lazy' stock selections that can be replicated by much cheaper ETF's. So you're gonna pay a massive premium for outperformance on the remaining 40%? Based on what? IMHO the people involved have no proven track record with regards to overseas stocks. I'll wait and monitor their performance for a few years before deciding whether to invest or not. What else are you investing in? Hope? Let's see who turns out to be right. We can compare the performance of DBX World and Astoria (after fees) over the next few years. If I'm wrong, I'll humbly apologise (but I don't think I will be).

[SimonPB]

no dude/dudette you do not get same in the ETFs .. you get 600 in DBXUS and some 1600 in DBXWD, it called concentration an as I mentioned that's the point of active .. check the FANGs against the SP500 last year, that the active vs. passive .. you can not be calling this passive .. now as I said, you welcome to be hating on active, but that a different story .. or you welcome to say they cr*p at active, but again that a different debate ??

[Siener]

Really? That's your argument for investing in Astoria? Historical FANG performance? That can also be replicated via various ETFs. Active management only makes sense if you invest in mid-to-smaller caps (or in smaller markets that are theoretically less efficient). In big markets with lots of players you need an 'edge' to generate alpha, especially if, like Astoria, you're simply investing in the biggest companies on the planet (whether it's FANGS or any other combination). How can they charge a management fee for 60% of their portfolio? With regards to the other 40% - sure, that's active management for sure, but it's risky to put your money in a team with no proven track record with overseas stock. It's a competitive landscape out there.

[THRESHOLD]

ASTORIA was set up to take advantage of desperation to get out of the Rand. Don't worry - if the Rand swoons - this thing will be off to the races again.

[kwagga]

If you have a long term view of ZAR weakness, then Ara is one of those companies you can put in the bottom draw and forget about it for 20 years. Sure, you pay management fees for ex Investec fat cats, but that will come under more and more scrutiny as this market evolves. This industry is up for a major shake-up when it comes to exorbitant fees, and no one will be spared. Add this one as part of a balanced long term portfolio and forget about it. We heard the same sounds when Reinet listed in 2009 and and six years and 100% in capital gains the sounds have quite down.

[#12]

A few confused arguments in this thread - here are my 2c worth. Firstly, as an SA investor, if you want overseas exposure, you have 2 choices - passive ETF's or active funds. (your 3rd choice is to stock pick, but that is a separate thread altogether). Loads of choice regarding passive funds, covered in previous threads. Now in the active fund range, you again have 3 choices 1) You buy into a mutual fund of sorts i.e. unit trusts 2) you buy into the companies offering mutual funds (my personal favourite mechanism) - Coronation and Peregrine are examples or 3) you buy investment holding companies - Astoria fits this category. Now the business case around investment holding companies is you are buying into their dealmaking ability, because they can pull off stuff that you as an investor never will (look at Brait, PSG or Naspers). This is where I have my doubts concerning Astoria - they are sitting with piles of cash, and have really only executed one portion of their investment strategy, which is publicly traded equities, not a lot of skill in this. It is what they are going to do with the remaining 60% of their cash which will determine their value.

[THRESHOLD]

As I said, their game is based on SA investors needing to get money out of here. Even if they do a very ordinary job... if the Rand weakens they will trade above their book. It's pointless comparing them to traditional managers - they are custom-designed for this market. Play them properly and you will probably do well.