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From: g451252772ea@ucdavis.UUCP (g451252772ea)
Newsgroups: net.invest
Subject: 1st Aussie Fund (& SUN! )
Message-ID: <98@ucdavis.UUCP>
Date: Mon, 27-Jan-86 22:01:59 EST
Article-I.D.: ucdavis.98
Posted: Mon Jan 27 22:01:59 1986
Date-Received: Wed, 29-Jan-86 04:21:17 EST
Distribution: net
Organization: University of California, Davis
Lines: 47


     The January "Money" issue discussed foreign investments, and mentioned 
a new mutal, "First Australia Fund", a closed-end no-load long-term capital- 
appreciation (say it 3 times, fast) fund of Australian stocks.  It's managed 
by Equitilink (who're they?) and has Prudential-Bache Insurance as US 
consultant.  PruBache Securities is the Fund's administrator (they've opened 
a lot of funds recently, most looking pretty trendy) (what's the diff 
between management & admin. here?).   
 
     I called PruBache (800 654 5454) for the prospectus (buying is through  
them also-- anyone know if that could be ONLY thru them?).  Some notes and 
questions from the prospectus: 
 
     The fund is apparently offering $35,000,000. total, at $10/share (so  
says the prosp. cover). Checking Saturday's NYTimes the stock price is indeed 
$10, but the Net Asset value is listed at 9.60.  (Only the Sat. NYTimes and  
the Monday WSJ list publically traded ("closed-end" funds.)  And last 
Monday's WSJ showed the price at 10 3/8, with a Net Asset of 9.53.  Early 
December the WSJ had it at valued at 9.09; 9 3/4 asked.  ... I'm so-o-o-o 
confused. Clarity would be reassuring.  And what does the 'authorized 
capital stock of the Fund of 20,000,000 shares of common stock, US$.01 par 
value' described inside the prospectus have to do with the cover offering 
above? 
 
     The distribution date of the fund isn't specified (there is a re- 
investment plan)-- I suppose PruBache would know when, if I cared to time 
buying to after that date?  The prospectus only mentions 'at least yearly', 
so no hurry.  Or is it likely that this fund, newly organized about October, 
is still an unknown gem, to be bought fast? 
 
     Total fees are about 1.5% for management.  Not cheap, but they talk a 
lot about currency hedging moves and extra expenses due to the foreign/US 
interaction.  It 'expects' to keep about 65% assets in stocks.  Large 
established companies are preferred.  Options will be utilized, tho still 
new to Australia, they say. 
 
     The main weirdity is taxes.  They state that their options and futures  
transactions will often result in 'straddles' for US Fed. taxes.  They also 
say 'the consequences of straddle transactions to the Fund are not entirely 
clear'!  So how is the individual taxee to understand? 
 
     Any other comments re/this specifically, or Australian investing 
generally are welcome.  And on a completely unrelated note, today's (1/27)  
WSJ states that SUN Microsystems has filed with the SEC to go public within  
the next two months.