A big reason why they rarely close the gap, is because they will...

A big reason why they rarely close the gap, is because they will usually announce a 10% buyback yet only buy about 2% of the shares back in a year only when they trade near 20% discounts.

The big unknown is if a LIC bought back 10% a year for a couple of years and actively bought back shares when the discount might be "only 10%". We very rarely see any examples of this.

Then all the LIC boards can conclude to shareholders that buybacks are not a solution. A convenient argument for the likes of some of the Wilson LICs to never do buybacks. Buybacks reduce the amount of fee revenue for the manager.

The sector has never really tested if buybacks work. They never actively buy back shares at around 10% discounts. In the US and UK we also regularly see off market buybacks of 25% of the fund at 98% of NAV. Once again this hardly ever gets tried in Australia. A convenient argument for the manager as they can point to the myths that "buybacks don't solve the discount issue in with LICs."

If VG1 bought back 25% of shares at discounts seen the last year the NTA would be at least a few percent higher from value accretion and totally risk free! Not bad for a manager that delivers at best 2% per annum over more than 6 years with all the heavy trading turnover, shorts and other macro garbage they pretend to have an insight on.