Things move fast in the world of FI. Friday evening saw FI announce their new dividend structure earlier than expected and, in doing so, they turned some traders’ strategies upside-down. This is the end of the beginning as FI enters the next phase in its development.
Whichever part of the market you trade in, I think you have to give FI huge credit for what they’ve done. An overall increase of 57% on dividends is more than generous, but focusing much of the increase on the Star Man position keeps it random enough to not risk undermining FI’s business model. MB has also had a decent boost which should go some way to repairing the damage caused by the opening up of MB to the squad and the loss of triple MB during the international breaks.
Better still (in my opinion) is the road map for future dividend reviews on a yearly basis, hopefully removing a lot of the uncertainty and speculation about what FI’s next move will be (I’m still hoping for tiered PB one day). The hint that there will be some sort of further rewards for longer-term player performance is also a good move if they’re trying to attract and keep the ‘whales’ of the Index. Putting all of this information out at the end of a deposit bonus period, with payday still to come before the changes take effect, is a masterstroke.
My only slight concern was the level of hype in the build up to the announcement. I know that ‘hype = more money into the Index’ but, for me, I think it’s risky to build things up so much. Say there’s an announcement coming, say it’s a good one, but does it need 64 rockets and various members of FI saying its going to be ‘massive’? I’m more in favour of ‘under-promise and over-deliver’ for FI at the moment, just because of the risk of getting it wrong. But luckily, this time, they got it bang on.
Unsurprisingly, this has had a huge effect on my numbers for the week and the idea of a ‘3 funds challenge’ is almost a joke at the moment because the Performance fund is so far ahead of the rest. That fund is up by £618 this week alone, thanks to some huge CA on top of a decent dividend yield, and is now running at a profit of 50% since 1st June – £1,676. Incredible.
I added Wijnaldum and Gundogan to the fund early in the week off the back of their excellent international performances. Robert Lewandowski was a last minute buy before the announcement as a hedge against another IPD increase. Nearly ever player in the fund is in the green this week, with only Embolo and Calleri letting the side down.
The Premiums had a good week too but nowhere near the bounce I expected. Profit over the week was £136 with total profit now standing at £599 or roughly 18%. Neymar and Kane were the big winners from the announcement but traders were still pretty lukewarm towards Sancho and Mbappe. Kane put in a decent showing for England, including a PB win, and definitely still looks like a value buy to me.
I’m not sure that the increase to MB (50%) has been fully appreciated yet, as it’s been somewhat lost in all the discussion about PB. With the January transfer window fast approaching, I’d expect to see further increases in premium priced players soon, which will stretch the market and thereby help the players lower down too. Everyone’s a winner…
…except in the short-term! The big ‘losers’ at the moment are the speculative youth buys, as demonstrated by the poor performance of my Potential fund over the week. Traders have a finite amount of money and want to put it where it will bring the best return, so it’s natural that cash has been withdrawn from those with little prospect of benefiting from the dividend increases. As a result, this fund finished the week £32 down and is now sitting on a total profit of £935 or 28%.
It wasn’t all bad news. Odegaard and Osimhen reversed the big drops of the previous week, putting them roughly at break-even point. Tonali saw a big rise over the week after making his debut for Italy, and the performances of Edouard and Gallagher in non-PB leagues continues to attract attention. However, the likes of Garner, Pinamonti, Bergwin, Gomez and Kang-In really dragged things down. Even the usually reliable Haaland had a poor week.
With the game well and truly changed, it’s a good time to take a step back and look at strategy. If I’m going to keep up this challenge for the rest of the season, I need to adapt to the new information available to me. There is still value in youth/non-PB league holds but I need to work out where that is as the margins are going to be tighter than they were before.
In terms of strategy, I think there are two key things to think about at this point in time. Firstly, the way I look at upcoming fixtures probably needs to change. Up until recently, the big opportunity was in single games due to the sums of money available relative to the number of players in the pot. FI have re-balanced the dividend structure so that bronze (single) days don’t have the same incentive as they did before, only receiving a 22% boost in dividends.
Silver (double) days have had a 46% boost and Gold (treble) days a massive 84% increase, with the Star Man in line for at least 16p, compared to 7p before. That’s a huge amount of money!
Based on that, there should be value to be found in PB-friendly players who have Silver days coming up, and also Gold days that are nearer the lower end of the number of matches that qualify (15+). This also gives a further boost to players who make it to the quarter final stage of the Champions League and Europa League, as these are automatically Gold days. I can see PB-friendly players in qualifying teams getting some staggering rises in the run up to these games.
The second area I want to give some thought to is trends, particularly where the next MB trend might come from. We’re nearly at the end of the Euro 2020 qualifiers so there will be more Media Days in the new year – and remember that MB has been boosted by 50%. The January transfer window will be soon upon us and then it won’t be long before we start thinking about Euro 2020. While everyone else is looking at PB-friendly players, there may be some MB beasts flying under the radar…
Both of the above points will need to flow through into my thinking about all 3 funds, including the Potential fund. If this fund is going to keep turning a profit then I really need to find the youth/non-PB league players with a realistic prospect of future dividends – taking a punt isn’t going to be good enough anymore, it needs to be much more concrete than that.
That’s a longer post than usual from me so I’ll leave it there. Comments and suggestions are always welcome. Happy trading!