Ann: Investment Update and NTA March 2021, page-5

I could understand taking on something like Aurora funds which has pretty much underperformed and traded at a discount from the day it was conceived.

But it would be ridiculous to attack funds like CDM that have outperformed the market since inception and will inevitably have its periods where it does really well and not so well.

Yes, CDM made a big mistake a few years ago, but this happens from time to time. Their overall track record remains intact and they have shown they can learn and bounce back from those mistakes.

Every LIC/MF I own has made mistakes. Even Platinum Capital (PMC) has traded at times nearly at a discount of nearly 15% to NTA - and that is a fund that had a long record of trading at a premium to NTA.

Forager Australian Shares Fund is another one I own that previously traded at a premium when they were doing well, then were dumped after a period of underperformance with the discount to NTA nearing 20%! Now look where it is, going up like a rocket over the past 12 months.

The point I'm making is if you took out every fund that traded at a discount of say greater than 10%, nearly all actively managed funds, even the longstanding PMC would not exist.

Discounts to NTA is one criteria. But there should be a strong argument that this discount is large enough, and likely to be permanent for a case to be made to close down a LIC. Other factors might include massive increases in fee structures etc.