Question 1: Is there a crypto ETF (Exchange Traded Fund)?
Answer: There is only one locally listed crypto ETF, BetaShares Crypto Innovators (CRYP). It invests in companies that are associated with crypto or the crypto infrastructure, such as the operator of the largest exchange, Coinbase. It doesn’t invest in cryptocurrencies per se.
It has had a pretty rocky ride since its launch on 2 November… it is down by about 35%.
Question 2: I was reviewing a recent piece [1] from Jeff Currie, of Goldman Sachs (CNBC 10/01/22) where he says the conditions are set for a super cycle in global commodities, especially copper. Are there any copper stocks that you could recommend on the ASX?
Answer: We looked at copper a few months back – here is the link [2] to the story from James Dunn.
Of course, the biggest copper producer is BHP – but its share price performance tends to get overshadowed by iron ore. It is my preferred way to hold exposure to the commodities cycle because it has a well-diversified portfolio with first-class assets.
Question 3: We have shares in Aventus REIT (AVN). There is a proposed merger with the Home Consortium (HMC) and HomeCo Daily Needs REIT (HDN). Should we elect to be paid out in cash for our Aventus shares or receive HomeCo Scrip for our shares? We originally bought Aventus for income but have significant capital gains as well.
Answer: Under the merger, you will get 2.20 HomeCo Daily Needs REIT units (HDN), (worth about $2.99) and the choice of either $0.285 in cash or 0.038 shares in Home Consortium Limited (HMC), the latter currently worth $0.281.
Most of the consideration is in units rather than cash.
With respect to the “choice” part, normally I would take cash over scrip. However, according to the Scheme Booklet, scrip for scrip rollover relief should be available – and if you have significant capital gains, this may be a key factor in deciding to take the scrip. There will also be rollover relief on the part you have no choice over; taking the units in HDN.
Question 4: Leigh Creek Energy (LCK) are issuing a share purchase plan to holders to build an Ammonia based fertilizer plant and generation facility. At 15c per share, do you consider this a buy?
Answer: Prima facie, with the SPP subscription price of $0.15 below the current share price of $0.16, participation would make sense. The recent institutional placement looks quite complex, which can be a bit of an ‘alarm bell’. I guess you have to be a “believer” in the Leigh Creek Urea project. I note that Morningstar has a valuation on the company of $0.42.
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