Charts, page-13

Compared with some other funds, investor confidence in LSF's ability to deliver the goods seems to be relatively low.

It is not just LSF's prolonged underperformance in 2018-19 that damaged investor confidence. Adding to the damage was the apparent failure of LSF's shorts to protect its NTA during the 2020 crash. In the crash, LSF seems to have performed no better than funds that held no shorts. The lack of detailed information about LSF's shorts is worrisome. Perhaps fortunately, LSF appears to have reduced its short holdings.

None of LSF's announcements seem to have ever mentioned this option, but as a last resort the fund could be dissolved if the gap between NTA and SP is impossible to eliminate.

If, hypothetically, LSF was to suffer another episode of major underperformance then there would be a strong case in favour of winding up the fund and paying shareholders out at the NTA price. Then shareholders might pocket 10-20% more than the SP. This is possibly a good reason for not selling even if LSF underperforms again.

At the moment a better reason for buying or holding is that LSF's NTA is currently outperforming the market. LSF's strong performance since April indicates that LSF has probably turned a corner and can now be relied on to deliver. But IMO it will take at least another six to twelve months of solid outperformance before investor confidence in LSF is sufficient to push the SP anywhere near the NTA. Even then, more buybacks might still be necessary. A dividend might work, although if any dividend has to have so many components that it causes a headache at tax return time then it could deter many investors.