The Warrant Thread (wt)

There used to be a number of Latin American trusts, Templeton ran up to last year and both F & C and Morgan Grenfell(final exercise 2005 and 2010 respectively) appear to have fallen by the wayside. This is another hazard with warrants that do not perform too well, I held Kleinwort Euro. and Taiwan IT and they were both liquidated. In spite of Time Value Protection the result for me was a small loss. As far as I can remember my main reason for not going in for a Latin American trust three or four years ago was concern about liquidity, there being only about 15m warrants issued for MGFL and FCL. Aberdeen LA is only 4m I believe.

Aberdeen Asian is an issue of 7m as compared with SDPW at 28m, but I agree that the former has an excellent record, and it has just won the emerging markets including Asia category at the Investment Week Trust of the Year awards. It has also figured in the Warrants Alert Technical Merit section in seven of the last twelve months. It runs to 2009, three years longer than SDPW. AASW being lower risk than SDPW is much lower geared at around 3 with a fairly high premium around 40/45. I can't fault it as a long term holding and I could consider switching some of my SDPW across. However, on the whole I prefer trading. AASW is in a downtrend channel which started at the beginning of March 2000. Just now the price is falling sharply from the upper area of this channel, so I should want to see it break out upside before purchase.