You have all been conned into buying a fee harvesting machine.
Geoff Wilson is charging you a 1% management fee plus a 20% performance fee above a ZERO hurdle, to pick out 10 LIC's trading at a discount to their NTA.
For the life of me, I cannot understand why anyone should be paid so much for what is essentially a passive strategy. Any 10 year old could be the portfolio manager of WAR - give them a list of the 50 listed LIC's, ask them to pick the 10 with the biggest discount and with a market cap greater than $150m and you're off and away.
These LIC's trade at a discount because fund managers are generally hopeless and the market values their ability less than the fees they charge.
Geoff has managed to do one better and create the first derivative of this - creating a LIC that charges exorbitant fees, to buy other fund managers LIC's who charge exorbitant fees. Accordingly, WAR trades at a discount to the discount.
If Goeff really believed in this strategy, then he'd double down and set up another LIC called FEE, that purchases WAR shares because they're trading at a discount.
Alternatively, he'd use the WAR cash balance to do a buy-back......however I forget that this would reduce the management fees.
Because of the fees inherent in WAR, the only way you could buy this thing is if it was trading at a 40% plus discount.
WAR Price at posting:
99.5¢ Sentiment: Sell Disclosure: Not Held
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