If you can’t handle periods of underperformance, I’d question why you’re still here, moreover why’d you “invested” ab initio.
Can you not accept a period of underperformance from a Fund? Do you expect market prices to correct within an arbitrary period of say a year?
The VG1 strategy replicates the VGI Partners Master Fund (the management has confirmed that they have essentially identical holdings).
Their strategy has outperformed the benchmark (net of all their fees and post-tax) - this has been achieved through more than a whole market cycle and sustained for a period of more than a decade.
No one can control market pricing in the short term. VG1’s market price went up then went down a lot then went up. It’s pricing relative to NTA has been above and below at different times.
The share price went up about 30% over a relatively short period. The discount of share price to NTA narrowed significantly over a short period. The price could go up another 30% or go down another 30%. The discount or premium could go up or down.
Equities are volatile. VG1’s style is long term investing, not short term performance. I wouldn’t get upset about the market price over less than 5 year periods, especially if the business performance is ahead of the market pricing.
This was clearly outlined in the product information and reiterated in all subsequent relevant correspondences from the company. It’s an inconvenient truth for those who are currently whinging, but who were unheard when the market price was rising or trading at a premium to NTA.
Do you believe that the LIC industry is dead? You might be right, but if you turn out to be wrong, then it would have been the worst time in the cycle to sell in my own opinion.
Market sectors slump and recover; different industries cycle through popular and underperforming periods. Are LICs in a cyclical or structural down period? Even, when industries suffer, the best companies within those industries may survive, even thrive, as they outperform their competitors.
By the way, I have no connection to VGI Partners whatsoever other than as an investor. I have not spoke to any of them for several years other than several queries made to the Investor Relations team via email.
This contrasts with at least some HC members who have admitted to having liaised with “activist investors” (e.g. who have generic-sounding HC accounts and who joined around the time this man-made issue was brewing before it became public).
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