Weiss Korea Opportunity Fund - Half-Yearly Financial Report and Unaudited Financial Statements for the Period Ended 30 June 2025
LEI 213800GXKGJVWN3BF511
(Classified Regulated Information, under DTR 6 Annex 1 section 1.1)
HALF-YEARLY FINANCIAL REPORT AND UNAUDITED FINANCIAL STATEMENTS
FOR THE PERIOD ENDED
Company Performance
As at As at
30 June 2025 31 December 2024
£ £
Total Net Assets 112,585,886 96,960,467
NAV per share 1.63 1.40
Mid-Market Share price 1.52 1.36
Since Managed WKOF Inception
Wind-Down to Managed
Wind-Down
NAV Return 20.3% 79.2%
Benchmark 27.3% 41.4%
Return
As at As at
30 June 2025 31 December 2024
Portfolio 22.7% 46.0%
Discount*
Share Price (6.8%) (3.2%)
Discount
Fund Dividend 2.7% 3.8%
Yield
Average Trailing 12-Month P/E Ratio of 9.2x 6.0x
Preference Shares Held
P/B Ratio of Preference 0.3 0.3
Shares Held
Annualised Total Expense 2.5% 2.0%
Ratio
*Since Managed Wind-Down
Performance since the start of Managed Wind-down on
*Portfolio Discount
The portfolio discount represents the discount of WKOF’s actual NAV to the value of what the NAV would be if WKOF held the respective common shares of issuers rather than preference shares on a one-to-one basis.
As at close of business on
Chair’s Report
For the period ended
Company Performance
During the period, the Company announced its intention to enter into Managed Wind-down, which was approved by Shareholders on
Dividend
The Directors declared an interim dividend of
Compulsory Redemption
On
Future Redemptions
As separately announced today, the Company is pleased to confirm that it intends to return £35 million to Shareholders by way of a second compulsory redemption of shares. The second redemption is expected to be executed following the close of business on
Subject to market conditions and other factors, we currently anticipate the liquidation of the Company and a final compulsory redemption to occur in the months following completion of the second compulsory redemption. We are mindful of managing the impact of costs on a diminishing portfolio of assets and will seek to liquidate the Company in a cost-effective manner. Shareholders will be closely informed of developments. It is also noted that the Company will be required to de-list before liquidation can take place.
I look forward to communicating with you about WKOF’s further progress over the coming months. If any Shareholders wish to speak with the Board, please contact Singers, and we will be happy to answer any questions you may have.
Chair
Investment Manager’s Report
For the period ended
Managed Wind-down of the Fund
As discussed in last year’s Annual Report, we notified WKOF’s Board of Directors in
-- Several large and more liquid preference shares had their discounts
narrowed to the point where they were no longer attractive investments
for the fund. Consequently, the pool of more liquid preference shares
available for investment decreased.
-- South Korea's continued efforts to open its financial markets to foreign
investors meant that the Company's holdings could now be replicated in
more cost-effective ways than through the Company itself.
-- It was felt that given the above and the performance over the last two
years that more shareholders would be likely to consider taking up the
realisation opportunity which was due to take place this year. If this
had happened, the overhead cost per share to investors would increase,
potentially to an uneconomic and unacceptable level.
The Board subsequently commenced a strategic review to consider the future of the Company and to explore the strategic options available, including a change of investment mandate and/or a potential combination of the Company’s assets with another suitable investment company or fund. The shortlisted proposals were thoroughly assessed and meetings were held with interested parties. However, due to the complexities associated with the shortlisted proposals that came to light in the detailed discussions, combined with differing views of Shareholders, the Board reached the decision that a Managed Wind-down was the fairest proposal and would be in the best interests of the Company and its Shareholders as a whole.
Shareholders approved the Managed Wind-down at an Extraordinary General Meeting on
WKOF Performance Attribution
Prior to the Managed Wind-down, WKOF’s returns (on a currency-neutral basis) were driven by five primary factors:
-- The performance of the Korean equity market generally as indicated by
the Korea Index;
-- The discounts of the preference shares WKOF holds narrowing or widening
relative to their corresponding common shares;
-- The performance of the common shares (which correspond to the preference
shares held by WKOF) relative to the performance of the Korean equity
market;
-- Excess dividend yields of the preference shares held by WKOF; and
-- Fees, expenses and other factors.
In order to compare WKOF’s relative return to the Korea Index, we report the attribution of these aforementioned factors to Company’s performance from inception until the date of the Managed Wind-down (
Performance Attribution Table
Return Component Inception to Managed Since Managed Wind-down
Wind-down
The Korea Index 57.9% 27.3%
Discount Narrowing (Widening) 72.4% N/A
Of Preferred Shared Owned
WKOF common Shares vs. The -24.6% N/A
Korea Index
Excess Dividend Yield of 14.5% N/A
Preferred Shares Owned
Fees, Expenses and Others -40.8% N/A
NAV Performance 79.2% 20.3%
Since the Managed Wind-down, WKOF increased its holdings of cash and cash equivalents and decreased its holdings of Korean preference shares. Given the recent market rally in Korea’s equity markets, WKOF’s NAV performance has lagged The Korea Index.
WKOF Inception to Managed Wind-down performance is calculated from
Performance since the start of Managed Wind-down on
Hedging
Prior to the Managed Wind-down performance, WKOF pursued its investment strategy with a portfolio that was generally long-only. However, as further described in earlier Annual reports, the Board approved a hedging strategy intended to reduce exposure to extreme events that, earlier, would have been catastrophic to its Shareholders' Investments in WKOF because of political tensions in
WKOF limited its use of hedging instruments to the purchase of credit default swaps (“CDS”) and put options on the MSCI Korea 25/50 Index. As noted in the 2024 Annual Report, we expected WKOF’s exposure to CDS to gradually decrease during the Managed Wind-down process. As of
Concluding Remarks
Thank you to our long-term shareholders. We are proud of WKOF’s performance during the 12 years the Company has been listed on AIM, during which we have continually sought to do what is in the best interests of shareholders. We continue to believe the Managed Wind-down is in the best interest of our shareholders.
Statement of Financial Position
As at
As at As at
30 June 31 December
2025 2024
(Unaudited) (Audited)
£ £
Assets
Financial assets at fair value through profit or loss 97,855,874 94,780,296
Other receivables 3,377,866 913,777
Margin account 587,037 1,041,581
Cash and cash equivalents 13,005,240 1,224,127
Total assets 114,826,017 97,959,781
Liabilities
Derivative financial liabilities - 283,591
Other payables 2,240,131 715,723
Total liabilities 2,240,131 999,314
Net assets 112,585,886 96,960,467
Represented by:
Shareholders' equity and reserves
Share capital 33,912,856 33,912,856
Other reserves 78,673,030 63,047,611
Total Shareholders' equity 112,585,886 96,960,467
Net Assets Value per Ordinary Share 1.6254 1.3998
The Financial Statements were approved and authorised for issue by the Board of Directors on
Chair
Director
Statement of Comprehensive Income
For the period ended
For the period For the period
ended ended
30 June 2025 30 June 2024
(Unaudited) (Unaudited)
£ £
Income
Net gain on financial assets at fair value 18,501,449 8,955,523
through profit or loss
Net gain on derivative financial instruments at 283,591 334,628
fair value through profit or loss
Net foreign currency losses (78,141) (317,329)
Dividend income 1,984,071 2,945,724
Bank interest income 8,655 2,788
Total income 20,699,625 11,921,334
Expenses
Operating expenses (1,812,512) (1,915,084)
Total operating expenses (1,812,512) (1,915,084)
Profit for the period before dividend 18,887,113 10,006,250
withholding tax
Dividend withholding tax (436,489) (647,437)
Profit for the period after dividend 18,450,624 9,358,813
withholding tax
Profit and total comprehensive income for the 18,450,624 9,358,813
period
Basic and diluted earnings per Share 0.2664 0.1351
All items derive from continuing activities.
Following review of the AIC SORP and its impact on the Statement of Comprehensive Income, the Board has decided not to follow the recommended income and capital split. This is due to the fact that the Company’s dividend policy is not influenced by its expense policy.
Statement of Changes in Equity
For the period ended
Share Other
capital reserves Total
For the period ended 30 June 2025 £ £ £
(Unaudited)
Balance as at 1 January 2025 33,912,856 63,047,611 96,960,467
Total comprehensive income for the period - 18,450,624 18,450,624
Transactions with Shareholders, recorded
directly in equity
Distributions paid - (2,825,205) (2,825,205)
Balance as at 30 June 2025 33,912,856 78,673,030 112,585,886
Share Other
capital reserves Total
For the period ended 30 June £ £ £
2024 (Unaudited)
Balance as at 1 January 2024 33,912,856 82,936,848 116,849,704
Total comprehensive income for the period - 9,358,813 9,358,813
Transactions with Shareholders, recorded
directly in equity
Distributions paid - (3,591,484) (3,591,484)
Balance as at 30 June 2024 33,912,856 88,704,177 122,617,033
Statement of Cash Flows
For the period ended
For the period ended 30 For the period ended 30
June 2025 June 2024
(Unaudited) (Unaudited)
£ £
Cash flows from operating
activities
Profit and total
comprehensive income for 18,450,624 9,358,813
the period
Adjustments for:
Interest income (8,655) -
Net gains on financial
assets at fair value (18,501,449) (8,955,523)
through profit or loss
Exchange losses on cash and 235,138 557,166
cash equivalents
Net gains on derivative
financial instruments at (283,591) (334,628)
fair value through profit
or loss
Increase in receivables (1,539,090) (13,594)
excluding dividends
(Decrease)/increase in
other payables excluding (109,933) 172,882
withholding tax
Dividend income net of (1,547,582) (2,298,287)
withholding taxes
Dividend received net of 2,256,924 3,358,429
withholding taxes
Bank interest received 8,655 -
Purchase of financial
assets at fair value (76,471,607) (39,218,509)
through profit or loss
Proceeds from the sale of
financial assets at fair 91,897,478 40,041,173
value through profit or
loss
Net cash generated from 14,386,912 2,667,922
operating activities
Cash flows from investing
activities
Opening of derivative - 87
financial instruments
Closure of derivative - (141)
financial instruments
Decrease/(increase) in 454,544 (27,001)
margin account
Net cash generated from/
(used in) from investing 454,544 (27,055)
activities
Cash flows from financing
activities
Distributions paid (2,825,205) (3,591,484)
Net cash used in financing (2,825,205) (3,591,484)
activities
Net increase/(decrease) in 12,016,251 (950,617)
cash and cash equivalents
Exchange losses on cash and (235,138) (557,166)
cash equivalents
Cash and cash equivalents
at the beginning of the 1,224,127 3,364,287
period
Cash and cash equivalents 13,005,240 1,856,504
at the end of the period
For further information, please contact:
SingerCapital Markets Limited James Maxwell /James Fischer – Nominated Adviser +44 20 7496 3000James Waterlow – Sales NorthernTrustInternationalFund Administration Services (Guernsey) Limited +44 1481 745001 Company Secretary
