WAM Poor Performance over last 5 year, page-95

Hi @joewolf

I do not own ARG or WAM but I thought I would do a comparison as it is related to an issue I am working on (i.e. comparison of LICs to ETFs).

The data below is the actual end of January data from the ASX for the previous ten years. It show that the annual returns of ARG and WAM are very similar when you do not include the franking credit of dividends but WAM's performance is better (slightly) if you do include the franking credit in your returns.

However, you should look at the variance between the annual returns. ARG had a blinder in 2013 but WAM had a blinder in 2017. That says to me the average return is not a great way to compare the two LICs for short term investors. It is certainly much better than bank interest though over the longer time period. I would be happy to put my mother into either of these LICs.

It is also worth considering that more of ARG's returns are capital gains so if the investor has to pay capital gains tax then ARG's returns are less after applying the tax payers marginal tax rate (when they cash out).

This comparison also does not look at the investment manager performance of the two LICS. The NTA (pre and post tax) is the real measure of the investment manager performance. The market price is just the amount people are prepared to pay at any one point. The investment performance below is somewhat influenced by the ability of the manager of the two LICS to get their share price to a NTA premium which is real money in short term investor's pockets.

Further caveats: these figures do not include a good market crash or the effect of dividend reinvestment schemes, option issues, capital gains tax on the capital part of the return, etc.

Comparison between ARG and WAM at end Jan
	ARG						WAM
	Price	Div prev	Franking	return	return inc		Price	Div prev	Franking	return	return inc
		year	credit		franking			year	credit		franking
2012	528						152.0
2013	667	26.0	11.143	31.25%	33.36%		167.5	11.0	4.714	17.43%	20.54%
2014	731	26.5	11.357	13.57%	15.27%		196.5	12.0	5.143	24.48%	27.55%
2015	799	28.0	12.000	13.13%	14.77%		201.0	12.5	5.357	8.65%	11.38%
2016	756	30.5	13.071	-1.56%	0.07%		216.0	14.0	6.000	14.43%	17.41%
2017	761	30.5	13.071	4.70%	6.42%		239.0	14.5	6.214	17.36%	20.24%
2018	839	31.0	13.286	14.32%	16.07%		245.0	15.0	6.429	8.79%	11.48%
2019	780	31.5	13.500	-3.28%	-1.67%		208.0	15.5	6.643	-8.78%	-6.06%
2020	875	33.0	14.143	16.41%	18.22%		226.0	15.5	6.643	16.11%	19.30%
2021	875	30.0	12.857	3.43%	4.90%		224.0	15.5	6.643	5.97%	8.91%
2022	993	28.0	12.000	16.69%	18.06%		216.0	15.5	6.643	3.35%	6.31%
Average				10.87%	12.55%					10.78%	13.71%