The Fonterra Shareholders' Fund has proved to be a success a year after it was launched, its management company says.
FSF Management Company chairman John Shewan told its annual meeting of unit holders in Auckland today that the fund's capitalisation based on current unit values was $693 million, about 7 per cent of Fonterra's market capitalisation of $10.2 billion.
Over the past year two dividends totalling 32 cents had been distributed, representing a yield of 5 per cent, and a 1:40 bonus issue had created 2.4 million new units. Both the dividends and the bonus issue had mirrored returns to farmers on Fonterra shares, Shewan said.
"Although it's fair to say the legal structure of the fund is complex, the principles are straightforward and investors and analysts have got up to speed with them very quickly," he said.
Over the year the units had traded from $6.37 to $8.09 and liquidity had been pleasing, with the units in the top 10 traded stocks by volume on most days, he added.
John Wilson, Fonterra Co-operative Group chairman said that as well as succeeding in strategic terms the fund had offered external investors the opportunity to participate in Fonterra's performance for the first time.