HML (ASX) Ann: Update on Audited Financial Statements

Originally posted by BarneyMaroon: ↑

Certainly my personal experience of using LICs has been very disappointing, so I agree that it is rational that there should be a discount on LICs to allow for the large fees. Have not owned one yet that has accessed the 10% of out-performance fees.

What sticks in my craw is when companies drift along at 15-20% discount. It is so blindlingly obvious that they should shut up shop and return investors money - or better still go on a massive buy back and then sell up and return capital. Instead they sit on their captive money and bleed it out (sorry public holiday and Ive just woken up from my nana-nap and grumpy as hell). I wonder what directors charged with legally looking our for shareholders do at their board meetings. Should we vote for shareholders, or vote to keeps our fees and mumble about serving a need in the sharemarket?

That said at least you can often walk away with 85% of your cash on markets - that's a bloody win for LICs.as HML holders know.

Still hold ARG as it easier to pass the franked divies through the trust to the kids (yep, I'm that lazy!). Also still hold PMC - bought before the wide range of intl ETFs was around. Wish I didn't still hold. After not looking at it for a year - I managed to log on the check on the day it hit an 18 month low. Bugger that.

Did I say I hate LICs?

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I dont agree and I think you may soon find out why ETF's have a flaw as well. The ETF mirrors the sector or the broader market. The higher growth no profits companies have been flying for the past two decades. Easy money based on valuing revenue growth. The WeWork debacle is now playing out and plenty of investors are going to lose a lot of money. APT has a very high valuation based upon the opportunity rather than the past. I dont mind an LIC that doesn't hit the index as the index has some of the flyers baked in. What I am looking for is a reasonable return with less downside - I think your example ARG is exactly that and it is low cost and no outperformance fee. I dont mind that over 10 and 15 years (at present) they are around 1% per annum less than the index- the next large correction should fix that. Overseas I think unicorns may well end up as that mythical creature when some of these outrageous valuations get killed and then it will be interesting to see how many very large superfunds have been favouring these self valued assets and bumping up performance on the back of an untested valuation. You are correct that the boutique LIC that tries to convince you they will outperform the market is probably dead and now its a way to lock in annual fees. These must logically disappear.