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Share price to
Net Tangible Assets (NTA)

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It is important to take note of where the share price is trading relative to the net tangible assets.

Investors in Listed Investment Companies often talk about shares trading at a 'discount' or 'premium' to NTA, below is an explanation of what this means.

Share Price is the current price of an Djerriwarrh share on the ASX. Net Tangible Assets per share (NTA) is the value of the total portfolio divided by the number of shares on issue.

Using a simple example, if the value of the total portfolio is $100 and the number of shares on issue is 10, then the NTA is $10 per share.

NTA per shareShare priceTrading
$10$11At a premium
$10$9At a discount

The chart below outlines where the Djerriwarrh share price has been trading relative to the NTA at the end of each month.

There are a number of factors that influence whether shares trade at a discount or a premium.

  • The yield on Djerriwarrh's share price relative to other investments that provide income, including the level of interest rates
  • Perception of management and likely future performance, including dividends
  • Supply and demand for shares at any one time can fluctuate. In particular, the demand for Djerriwarrh shares appears to respond to the general setting for interest rates as well as income available from other asset classes and/or products. In addition, if investors become more focused on growth rather than income, investors may elect to move out of "income" shares into "growth stocks". Conversely, when market conditions are more subdued, investors may value a steadier stream of dividends and a more quality/value based approach to investing
  • The relative benefit of lower costs of managing the portfolio on behalf of shareholders compared with the higher costs associated with a large proportion of managed funds