I continue to watch MLT, AFI , ARG and BKI continually underperform the index for numerous years.
As this latest MLT monthly update handsomely displays.
and yet AFI and ARG have been trading lately at premium to NTA which is just ridiculous.
they had their place in the past before ETFs came on the scene, as a way to cheaply access an index style fund at low cost.
The large old style LICs are far too heavily concentrated on the Aussie large caps 4 banks, 2 miners, and boring chronic large cap underperformers such as Telstra and Wesfarmers.
They don't sell badly performing stocks they have held for years for fear of capital gains tax.
They do not deserve the venerable status that some people regard them with. Age alone does
not warrant respect in the investing world ; performance is everything as far as I'm concerned.
They get heavily promoted to newbs by people such as "the Barefoot investor" as an easy way to invest for
people with little knowledge or interest in the markets.
But I believe with a little effort we can do much better.
If you want index type performance you may as well just buy an index ETF these days.
At least then you don't have to worry about those pesky and inexplicable discounts and premiums to NTA.
If you want to buy AFI, MLT, ARG, BKI cheaply when they are at discounts to NTA, that would be fine.
But IMO if you want an active manager there are much better performing LICs these days with much better prospects such as the Wilson funds WLE, WAM, WAX, WMI , Magellan, Platinum, Antipodes, Forager etc.
There will soon be a plethora of active ETMF's ( exchange traded managed funds ) coming to the market which will be fantastic. Just like buying any share on the ASX, minimum $500 ( don't confuse them with "mfunds" which often require minimum purchase of $20K or more )
So far there are only mainly some few global ETMFs ( Magellan global, Magellan infrastructure, Platinum international, Platinum Asia , Montgomery global : these are basically a listed copy of their very successful unlisted managed funds ), very few Aussie ETMFs such as Switzer Dividend growth fund, Betashares Legg Mason Equity income fund.
Magellan has bought Airlie Funds management ( Peter Sevior fund ) and planning to release Airlie Industrial share fund as an ETMF in coming months. also Antipodes global.
the flood gates will open to listed exchange traded managed funds which will make buying and selling active managed funds so much easier.
http://www.financialstandard.com.au/news/fidelity-to-launch-active-etfs-115823947
http://www.smsmagazine.com.au/articles/antipodes-unveils-active-etf-new-md
each to their own, horses for courses as they say.
but I think there are many many better options out there, and soon to be many more, than boring
old underperforming AFI, ARG and MLT.
cheers
