ASA Gold and Precious Metals Limited · NYSE:ASA
ASA Gold and Precious Metals — Proxy Contest (April 2024)
32 slides from ASA Gold and Precious Metals's proxy contest presentation, Apr 1, 2024
Slide 1: ASA Gold & Precious Metals Fund
April 2024 ASA Gold & Precious Metals Fund Managed by Merk Investments Since April 2019 Established 1958
Slide 2: Executive Summary
Executive Summary 2 ▪ ASA : A unique offshore investment vehicle launched in 1958 after obtaining an exemptive order from the SEC to register as a closed - end fund in the US, subject to multiple conditions . ASA’s Gold and precious metals investment mandate has created value for long - term investo
Slide 3: ASA Board
ASA Board 3 William Donovan, Independent Director since 2020 Mr. Donovan's directorship since 2020 brings a wealth of investment and asset management experience to ASA. His leadership in ha ndling the significant pension fund assets at United States Steel and Carnegie Pension Fund, where he was deep
Slide 4: Actively Engaged Board
Actively Engaged Board 4 ▪ Deep Expertise; Independent Governance; Active Oversight: ▪ Board has expertise in precious metals and mining, finance, corporate governance, investment management, fund oversight and fund regulation. ▪ 75% independent composition, independent chair, full meeting attendanc
Slide 5: Actively Engaged Board
Actively Engaged Board 5 ▪ Board Prioritizes Shareholder Interests: ▪ The Board consistently prioritizes the interests of ALL shareholders. ▪ Despite Saba’s assertions, Board monitors discount regularly, including through receipt and discussion of quarterly reports on the discount, and considers pro
Slide 6: ASA Portfolio Management
ASA Portfolio Management 6 Axel Merk – Chief Investment Officer Axel Merk is the President and Chief Investment Officer of Merk Investments, and manager of the Merk Funds. He holds a B.A. i n E conomics (magna cum laude) and a M.Sc. in Computer Science from Brown University. Axel founded Merk Invest
Slide 7: ASA Performance
* The 5 - year return includes 2 months of the previous portfolio management team ** The 10 - year return has more than 5 years of the previous portfolio management team. ▪ ASA is a non - diversified equity sector fund focused on precious metals ▪ Merk transitioned the portfolio to small cap mining
Slide 8: Fund Performance
The NYSE Arca Gold Miners Index (Total Return) is a modified market capitalization weighted index comprised of publicly trade d companies involved primarily in the mining for gold and silver. Source: Bloomberg Fund Performance 8 ASA outperformance since April 2019 ▪ XXASAXX: ASA NAV ▪ ASA: ASA Equit
Slide 9: Fund Performance: ASA NAV vs. NYSE Arca Gold Miners Index since April 2019
Fund Performance 9 Total Return ASA NAV vs. NYSE Arca Gold Miners Index since April 2019 The NYSE Arca Gold Miners Index (Total Return) is a modified market capitalization weighted index comprised of publicly trade d companies involved primarily in the mining for gold and silver. Source: Bloomberg P
Slide 10: Fund Performance: ASA NAV vs. NYSE Arca Gold Miners Index
Fund Performance 10 Total Return ASA NAV vs. NYSE Arca Gold Miners Index The NYSE Arca Gold Miners Index (Total Return) is a modified market capitalization weighted index comprised of publicly trade d companies involved primarily in the mining for gold and silver. Source: Bloomberg Past performance
Slide 11: Fund Performance: ASA NAV vs. VanEck Junior Gold Miners ETF
Fund Performance 11 VanEck Junior Gold Miners ETF (GDXJ) seeks to replicate as closely as possible, before fees and expenses, the price and yield performance of the MVIS Global Junior Gold Miners Index (MVGDXJTR), which is intended to track the overall performance of sma ll - capitalization companie
Slide 12: Fund Performance: ASA NAV vs. VanEck Junior Gold Miners ETF
Fund Performance 12 Total Return ASA NAV vs. VanEck Junior Gold Miners ETF VanEck Junior Gold Miners ETF (GDXJ) seeks to replicate as closely as possible, before fees and expenses, the price and yield performance of the MVIS Global Junior Gold Miners Index (MVGDXJTR), which is intended to track the
Slide 13: Fund Performance: ASA versus Mutual Fund Peers
Fund Performance 13 The 5 - year return includes 2 months of the previous portfolio management team. The 10 - year return has more than 5 years of the previous portfolio management team. Source: Bloomberg ASA versus Mutual Fund Peers (used by Board to evaluate ASA, along with relevant indices) Data
Slide 14: Fund Performance – ISS
Fund Performance – ISS 14 ▪ Given that there are no suitable competitor closed - end funds in the US, the Board comparing ASA’s portfolio performance to that of the aforementioned open - end gold funds is appropriate, even though they invest in larger precious metals mining companies than ASA, and m
Slide 15: ASA Portfolio Composition
ASA Portfolio Composition 15 Data: 4/1/2019 – 1/31/2023 Source: Merk
Slide 16: ASA Portfolio Liquidity
ASA Portfolio Liquidity 16 ▪ ASA’s holdings have an asset - weighted Bloomberg Liquidity Score of 46 Bloomberg’s Liquidity Score reflects the security’s centile rank within a peer group and is represented with a value between 1 a nd 100, where a score of 100 represents the most liquid security. Data
Slide 17: ASA Discount
ASA Discount 17 1 Year since Merk started managing ASA Data: 2/28/2017 – 2/29/2024. Daily NAV pricing started 4/1/2019. Source: Bloomberg 1 Year Moving Average of ASA’s Discount
Slide 18: ASA Discount
ASA Discount 18 ▪ Periods of portfolio outperformance are associated with widening discounts ▪ The market takes time to catch - up. It’s part of the reason why we communicate holdings and the investment process more proactively. That said, many factors can influence discounts. Past performance is no
Slide 19: Discount - Oversight
Discount - Oversight 19 Board Oversight ▪ The Board assesses portfolio performance based on NAV, and of course monitors discounts on an ongoing basis. Board and Adviser are not mandated to "manage" the discount nor would this be feasible as they do not control market actions and influences. ▪ The Bo
Slide 20: Discount Tools (1/4)
Discount Tools (1/4) 20 Enhanced Transparency ▪ Daily NAV publications initiated in April 2019 for enhanced valuation clarity. ▪ Regularly updated monthly fact sheets showcasing complete portfolio holdings. Communication of Investment Process ▪ Consistent and transparent investment process. ▪ Ongoin
Slide 21: Discount Tools (2/4)
Discount Tools (2/4) 21 Investment Policy Change: ▪ ASA’s Board believes the vast majority of ASA shareholders want ASA to continue its mandate of investing in the gold and precious metals sector and providing a differentiated product that allows access to a segment of the gold and precious metals s
Slide 22: Discount Tools (3/4)
Discount Tools (3/4) 22 Distribution Increases and Managed Distribution Plans: ▪ Regular Review ▪ The Board considers the distribution rate in light of the portfolio and income generated, ASA’s status as a passive foreign investment company (“PFIC”) and level of assets. ▪ Distributions in ASA used t
Slide 23: Discount Tools (4/4)
Discount Tools (4/4) 23 Tenders and Share Repurchases ▪ Tender offers and share repurchases only provide a short - lived discount reduction while spreading fixed costs over a shrinking asset base, potentially jeopardizing ASA’s survival. ▪ Both actions reward only some shareholders who know to opt i
Slide 24: Discount Tools: Board's View on Mergers
Discount Tools 24 ASA’s Board’s View Regarding Mergers : ▪ ASA’s Board has been and continues to be open to opportunities for corporate actions with a non - US entity compatible with ASA. ▪ Any corporate action that involves a merger with another entity, if feasible, would be complicated given ASA’s
Slide 25: Saba Lacks Experience
Saba Lacks Experience 25 In the Board’s assessment, Saba lacks relevant experience to take over ASA: ▪ No precious metals expertise ▪ Saba lacks expertise in precious metals and investing in the mining sector; this begs the question as to how Saba or its proposed director nominees could manage ASA a
Slide 26: ASA Board – Rights Plan
ASA Board – Rights Plan 26 ▪ Shareholder Focused ▪ The Board is committed to protecting the interests of ALL shareholders, standing against actions that disproportionately benefit a single party at the expense of others. ▪ Shareholders, aside from Saba, have not pressed for change on the discount or
Slide 27: Shareholder Activism Threatens Closed-End Funds
▪ May 24, 2023 – Shareholder Activism Threatens Closed - End Funds and Their Investors ▪ March 2020 – Summary and Recommendations Regarding the Availability of Closed - End Fund Takeover Defenses ▪ Study of the potential negative impacts of activist campaigns on closed - end funds. ▪ Activists pursu
Slide 28: Proposals
Proposals 28 ▪ Support ASA’s Board ▪ Support a 60% Supermajority to Change the Fund’s Investment Objective ▪ ASA’s focused investment strategy is fundamental to its identity and requires broad consensus for change. ▪ The 60% requirement is relatively low, does not prevent change and will allow broad
Slide 29: Proposal – ISS: Increase Authorized Shares
Proposal – ISS 29 Proposal to Increase Authorized Shares - ISS Considerations ▪ The proposed measure allows all investors to convey views on ASA's capital initiatives and future defenses, rather than merely providing advisory feedback on past actions. ▪ ASA’s rights plan is subject to a statutory li
Slide 30: Disclosure
Disclosure 30 Forward - Looking Statements pertaining to ASA Gold & Precious Metals Ltd. (the "Company") This presentation includes forward - looking statements within the meaning of U.S. federal securities laws. The Company’s actual performance or results may differ from its beliefs, expectations,
Slide 31: Appendix: Prior Saba Proxy Contests
Appendix: Prior Saba Proxy Contests 31 Published Saba holdings Q2 2014 – Jan 2024 Source: BBG Jan 2019 – Jan 2024. Source: BBG Saba takeover of Voya Prime Rate Trust (PPR), now BRW Saba reduced stake in 2021 by 72%, down 88% by end of 2023
Slide 32: Appendix: Prior Saba Proxy Contests
Appendix: Prior Saba Proxy Contests 32 Published Saba holdings 2014 – Jan 2024 Source: BBG Jan 2021 – Jan 2024. Source: BBG Saba takeover of Templeton Global Income Fund (GIM), now SABA: In Q4 2023 alone, Saba’s fund holding (green in chart below) declines by 71%
ASA Gold & Precious Metals — Proxy Contest (April 2024) on 6ix