WAM Poor Performance over last 5 year, page-83

I have been in this finance industry for decades and this isn't the first time people see more about what is advertised. Advertising can be an expose in the AFR that features GW or the grouping of funds. It looks like in depth reporting but if you actually look closely it is in fact not taking all aspects into account.

Finance is about detail and really the fine print. The next red herring will be that we got options. Or preferences in the IPO of ...

The reality is that WAM may even equal ARG if you add back their fees so the underlying portfolio performance may be the same but when you take the fees and performance bonuses it isn't. No I don't think you have to take fees off as they would have been paid.

We only own WLE and that was because in the downdrafts it became way below NTA and thus buying it then we have gained around 46%. Now we don't mind the fees as it is paid for by the unrealised profits. To sell them we would incur around a 12c tax so in fact that means we would end up with 90% of what we have today. we would rather let it ride for a few years. We re-invest the distributions elsewhere.

The high distributions also have an impact as it tends to create the gap in NTA growth. I prefer a capital gain for a SMSF as you can get the discount. So you really have to model and profile your investment position and tax position.

I think we are heading to an era of a new hybrid company that holds an equity portfolio and operating assets. Strangely the first time I truly saw one was ECL - They seem to be drifting back to almost invest in their cable business but for a few years it did shake up the entities and they have unlocked some value and some tensions it seems. Their remuneration report being voted down for the second time.

The other one must be SOL - their takeover of MLT has truly created a hybrid. Maybe this is the true future of stock pickers. That a WAM has to have an investment arm that includes something they can drive greater value from.

PS don't do the 10 year numbers for SOL vs WAM it may scare you - I suspect SOL has done even better than ARG.

I don't know who said this but the rule they had was you buy LIC's when they are so out of favour that even the well run ones are at a discount to NTA and you sell them when they are premiums to NTA.