I have a spreadsheet tracking the performance of NTA (pre and post tax) and share price. What has happened is TEK opened at around a 9.5% premium and as of 31/5/20 was at a 15% discount. This has resulted in the under performance you discuss. However, performance based on NTA is very different. Numbers below:
Date
Share price
Pre-tax NTA
Post-tax NTA
1
31/1/17
23c
20.8c
20.8c
2
31/5/20
25c
28.9c
31.9c
NTA has provided a 10.37% pa return pre tax and 13.69% pa return post tax (based on 31/5/20). Share price for this date has only provided 2.53% pa return.
This shows the effect share price premiums and discounts can have on performance of an LIC. However, I purchased TEK based on a long term hold. Therefore, I am more interested in the NTA performance as this is the underlying performance of TEK. The underlying performance looks good (ASX200 TR was 4.77% pa over the same time). Hopefully, with time the market will realise this and close the discount.
TEK Price at posting:
25.5¢ Sentiment: Buy Disclosure: Held
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