Over night a new buy signal was generated on CIM as a result of a take over announcement. This raises the question of what should be done in these circumstances.
We do have a rule in the Investment Plans that when an open position becomes the subject of a take over that position must be closed 20 days after the initial announcement. I’ve attached a link below to the Investment plan for viewing.
We don’t have a rule for when a takeover announcement triggers a new Buy signal, so you might like to create one that suits your own risk profile. EG, if a new buy signal is generated as the result of a takeover, I will/will not take the signal. It wont be a common event, but it is one that ideally you should have a rule for.
In the example of the public portfolio, CIM would be taken provided the portfolio has a position available and it has the highest ranking of any opportunities that day. It would then be exited 20 days after the TO announcement date.
As a result of the take over, CIM has now been sold from the SWS ASX Public Portfolio according to the rules of the Investment Plan.
The SWS SPA3 Investor Watchlist will also be updated to reflect the removal of CIM in the forthcoming release of Beyond Charts.