Sunday, April 30, 2006

Profit and Dividends

Projected dividends are hard to predict since EMFi is a derivative fund and the profit depends on the stock and IPO markets. The Stock Exchange in EvE is very young, hedging, options or going short isn't an option for EMFi so our success is related to the success of the stock issueing companies.

We expect to be mostly building up our portfolio and capital in the first months and projected net results range from 1.5% in June rising to more then 10% in 6 months time. This would result in a projected dividend payment of 128/share in june 255/share in july, and 1,000/share in december. Our fundmanager gets compensated based on performance alone, with a negative result the fundmanager and trustees will get no salary, with the projected june result of (1.5%) he would get 37.5M in salaries and this payment is directly related to his investment result.

Figure: projected result, invested capital and dividends

We are aiming to achieve a minimum of 7.5% dividend in 6 months time where 10% of the profit comes from interest, 40% of the profit comes from underlying stock dividends and the other 50% from stock trading (buy low sell high) and IPO underwriting.

Figure: profit source

Profit will be calculated based on this months NAV compared to last months NAV.

  • 85% of the profit will be issued as dividend to the shareholders
  • 2.5% of the profit will be issued as salary to the fund manager
  • 2.5% of the profit will be issued as corporate dividend (salary for trustee alts)
  • 10% of the profit will be used for fundgrowth and reserves against shareloss

Figure: profit distribution


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