Aspire
What is Aspire?
Aspire is a fund designed to seize the opportunities that avail themselves when a gap emerges between the share price trajectory and dividend trajectory of an outstanding company.
While over time and at points in time, these trajectories synchronise, on occasions where they may diverge, they present lucrative opportunities to benefit from an expected closure or catch-up.
How it Works
These catch-up windows, or zones of opportunity, tend to occur when the share price has performed strongly but has not kept pace with the dividend growth performance.
Per the Gordon Growth Model, the closure of these gaps presents unusually high potential upside — but, critically, without incremental risk. Because this dissonance is temporary, and the gap should eventually close, the fact that the dividend is travelling ahead of the share price is not only a profit-making opportunity but also a margin of safety.
At any point in time, one or more holdings may exhibit an exaggerated form of this dynamic. The Aspire Fund will target these opportunities intensively.
The Zone of Opportunity
When the dividend trajectory is momentarily outpacing the share price, the emergent zone of opportunity, or catch-up window, presents two streams of potential upside.
1) From the catch-up itself which presents an opportunity for a big win. Where there is evidence of an emerging catalyst for a catch-up on the horizon, Aspire may enter into a position to exploit this opportunity as the catch-up zone closes.
2) Within the catch-up zone many potential small wins exist. These present quick profit opportunities, extracted from the advantageous dynamic at play.
Our holdings
The holdings of the Aspire Fund will typically be a select subset of outstanding companies, most of which are also held in the DivGro Fund portfolio.
Each of these companies will be of the highest quality; with strong installed customer bases; and a demonstrated and/or promising future dividend growth trajectory.
The capacity of the Aspire Fund is strictly limited. To inquire, please contact info@divgro.com.au.