Icap is a close end fund listed in KLSE. It's managed by Mr. Tan Teng Boo, a famous, successful and highly respected fund manager.
I knew him (or rather I-Capital) from newspaper in year 2000, I subscript to his weekly after that until now. I find his analysis is one of the best in Malaysia if no the best.
I-CAP listed in Malaysia in Oct 2005, the shares price has constantly beat KLCI, went up from IPO of 1.00 to highest at 2.80 in Jan 2008. It has coming down to 1.96 on 27/6/08.
Because I-Cap is solely invest in KLSE, therefore it's performance always tract the performance of KLCI. Due to Mr Tan Teng Boo excellent performance in picking the right stocks, I-Cap NAV (net assets value) has gone up 84% up to date (in less than 3 years). An annualised return of 25% since listed up to today.
For retail investors that do not want to spend time to study/learn all the investment theories & philosophy, and prefer to invest in equity market directly & avoid unit trusts, I-Cap is the idea investment choice, but the timing to invest is vital for better returns.
Buy & Hold in I-Cap for long term will not give you the highest returns, suggest the following for you to maximise the investment returns in I-Cap :-
- I-Cap always traded at premium due to it's excellent record, i.e it's market price always higher than the NAV. In a prolong bear market, when market sentiment at the weakest level, it's shares price may dip below the NAV due to panic selling of it's holder. a 5% discount to it's NAV offer the investor a good opportunity to buy good fundamental undervalue stock via I-Cap. You get 5% discount from market price for many good stocks under the selection of I-Cap. A good deal!
- If we cant get I-Cap under the above condition (5% discount in prolong bear market), i.e. the market price never dip below the NAV (maybe all I-cap holder are Tan Teng Boo strong fans), then I suggest the interested party to wait for the market to bottom, when optimism return to shares market, when equity market started to bullish again, this is the time we re-enter the equity market via I-Cap, even we have to pay at premium of less than 8% . I-Cap will surge again because it's portfolio are comprise of good quality fundamental/under value stocks. this is the stocks that will out perform the market will the bull return.
- To enjoy highest returns in closed end fund (I-Cap), buy & hold is not the right strategy, we need to exit it when market is in prolong bull run, when market sentiment are hot, KLCI keep breaking record high, and the I-Cap shares price is in record premium of more than 20% over it's NAV. SELL it. The price will come down eventually when market correct.