Pivot to Shareholder Activism as 8% Value Activist!

This post first appeared on 8percentpa.substack.com

Time files. It has been c.20 years since we started blogging here. Today, few people use blogger. Blogger itself became difficult to use, ads and clickbaits dominate the posts. As such we ported to substack, an innovative newsletter platform, a while back. But we continue to post here from time to time.

In 2025, we pivoted to talk about activist stocks i.e. stocks owned by diligent, smart, activist fund managers who have made good money for their investors. From 2022 to 2025, we have also covered a couple of free cashflow compounders. We will still touch on these great stocks, the basic investment related stuff periodically, where relevant.

Shareholder activism is coming to Asia and Japan, because there are too many undervalued names. Even though everyone’s focused on US and its exceptionalism today, value is in Asia. As of 2025, roughly half of Asia’s listed stocks trade below book. 40% of all listed companies in Japan trade below book.

What is Shareholder Activism?

Shareholder activism is about investors using their stake in publicly listed companies to change the companies they have invested in for the better. In activist marketing lingo, it’s called positive transformation.

Publicly listed companies are complex animals. Most companies today have hundreds to thousands and for larger caps, hundreds of thousands or even more shareholders. Executive management of these companies answer to the board of directors who supposedly represent all shareholders.

But sometimes, things don’t really work. 

Cosy management are supported by dysfunctional boards and share price languished for years. Hence we have so many companies trading below book and we need activists to shake things up.

How do Activists Make Money?

Activists invest in cheap companies stuck with certain issues and they try to unlock value by resolving those issues. It could be changing management, or divesting poor performing businesses, or even taking the entire company private. It has been a viable strategy and some of the best activist funds have generated stellar long-term track records. Interested readers please read the Harvard study link below:

Harvard study on activists: https://corpgov.law.harvard.edu/2023/08/01/do-activists-beat-the-market/

Activism is not new. Warren Buffett was the activist when he took over Berkshire Hathaway in 1965. In the early 2000s, the current version of activism came back to the US in a big way and the movement then grew globally into Europe and more recently Japan.

Family controlled businesses in Asia might need a bit more time before activists can work their magic. This is because families owning 30-50% of outstanding shares make it difficult for activist to do anything. But the time will come. It is a matter of when, not if.

We want to be ready. We hope to make money by identifying the best activist ideas. That’s the mission!

What substack has to offer?

We have published monthly investment ideas for the past few years. We started with the usual free cashflow compounder ideas but we pivoted to discuss activist names in 2025. Interestingly, many names turned out to have activist involvement. Since Japan is the biggest hotbed, we will discuss a lot of Japan ideas, but will also touch on interesting global and Asian activist names.

From time to time we will opine on investment basics, fundamentals, portfolio trades and updates, investment strategies, market analysis and more. This substack is targeting both aspiring and seasoned investors. We publish posts every 5-10 days on both invested and toehold ideas.

We invite you to start as a free subscriber on substack. We are also on X, LinkedIn and Telegram!

Let's also connect on: 

LinkedIn: https://www.linkedin.com/in/8percentpa
X: https://x.com/ArvelVista
Telegram: https://t.me/+zF0bRcOXXo4zOTc9 

The rest of the post is on 8percentpa.substack.com

QYLP ETF - Deep Dive

This post first appeared on 8percentpa.substack.com

We wrote an earlier post on this covered call ETF. We discussed how it could be an interesting hedged play to benefit from the continuing rise of the Magnificent Seven and NASDAQ. Today, we will go through the fundamentals, technicals and valuation more deeply.

1. Fundamentals

QYLP is a covered call ETF for the NASDAQ100 (top 100 stocks on NASDAQ) denominated in British pounds (GBP). There is a primary ETF listed on NASDAQ with ticker QYLD and it tracks the index BXNT which is basically the same thing - covered call version of the NASDAQ100. Both QYLP and QYLD pay dividend monthly by writing covered call options of its constituents. Here’s the investment thesis for QYLP:

The QYLP ETF (Ticker: QYLP) is a covered call ETF listed in the UK that tracks the NASDAQ100 but overlaid with the writing of covered calls which generates option premiums that is paid out monthly. It has generated c.7% return over the last 12 months and would be able to contribute stable dividends to the portfolio while providing exposure to the NASDAQ top 100 constituents. While unrelated to activism, this exposure ensures participation in the event of continuing melt-up of the Magnificent Seven and the best run companies in the world today.

QYLP is an Ireland domiciled ETF and has the following fund details (screenshot below). As an innovative covered call ETF, expense ratio is slightly higher at 0.45%. Market cap is decent at c.USD480m (although the primary ETF has >USD8bn in AUM. The primary ticker is QYLD and there is more information for QYLD which is the ticker for the same instrument listed on NASDAQ and the USD denominated version on the LSE. QYLP is the GBP denominated version.

The following table shows the top 10 constituents of the QYLP as of Jul 2025. We can see the Magnificent Seven (Alphabet / Google, Amazon, Apple, Meta / Facebook, Microsoft, Nvidia and Tesla) prominently featured. In fact, the NASDAQ index represents the best run companies on our planet with perhaps a couple of exceptions. In a way, this investment idea is a hedge against missing out on the continuing growth of these greater-than-great companies. Granted the risk is that we are near the peak and should markets collapsed, we will be underwater for a while.

Performance and Track Record

The following charts show the performance of QYLP, QYLD and the QQQ indices. The Ireland domiciled, UK listed QYLP has the shortest track record and the numbers also assume that the dividends are re-invested. At 7+% annualized return, the track record is decent and comparable to the primary ETF (second table below).

Performance of the QYLP ETF listed on LSE with okay track record

The next table shows the performance of the primary index QYLD, listed on NASDAQ and denominated in USD. We can see that the annualized returns are not far from QYLP (above) at 7+%pa. That has been the case for the past 10 years and also since inception in 2013. Both indices are managed by the Korean asset manager, Mirae.

QYLD listed on NASDAQ with longer track record

The last chart shows the performance of QQQ, one of the most popular NASDAQ ETFs and we can see that performance triumphed both QYLP and QYLD by a huge margin. For 10Y, annualized return it was 18.7%! The price to pay for regular dividend income and less volatility is c.10% of return per annum, which is a lot.

That said, let’s analyze some of the positives and risks of owning this ETF.

Positives

Participation and diversification: As alluded to above, the exceptionalism of the Magnificent Seven (Mag7) is something unique in the past twenty years or perhaps the entirety of humankind. Less than 10 companies today generate more than USD50bn free cashflow (FCF) globally on an annual basis and we have almost every member of the Mag7 generating that much. To add, apart from the Mag7, most of the NASDAQ companies in the index are actually best-in-class and might well be the next generation of FCF juggernauts. As such, I believe the risk of missing out is not small and it pays to just have some exposure via this ETF.

To delve delve a little more on this topic, since we pivoted the portfolio to focus on activists, which is inherently a value strategy, there is almost no opportunity to invest in these best of the best NASDAQ names. Yes, one activist had engaged Google and even Microsoft was targeted in the past but activist stocks are usually not compounders. So having c.5% in some of these idiosyncratic strategies is a very pertinent for the portfolio. That’s one reason why we also have physical gold in the portfolio.

Next topic, regular dividends!

QYLP and QYLD’s distribution calendar published on https://globalxetfs.eu/funds/qyld/

Regular Dividend Income: The other attractiveness of QYLP is that we get regular monthly dividend (table above) on top of exposure to NASDAQ. The annual dividend has hovered around 11-14% which is highly attractive to dividend investors. Owning this ETF in the UK, which has no with-holding tax, is also one of the reason why we chose QYLP. Additionally, there is always a base of dividend buyers which ensures liquidity for the ETF. However, we pay a big price for this regular income. We missed out almost 10%pa based on past 10Y track record. Although I believe the gap should close the longer we hold this instrument.

Another way to think about QYLP is that rather than holding cash or T-bills in the portfolio, owning this ETF gives us regular dividends, exposure to NASDAQ and firepower to add to high conviction activist names should interesting opportunities arise in the future.

With that, let's discuss the risks.

Risks

Deviation in performance in performance: While the NASDAQ has recovered and exceeded its previous all-time high in Feb 2025, the stock price of QYLP has languished. I can think of two reasons.

The rest of the post is on substack.

Huat Ah!