2 Year Return - The real deal

[TjamesX]

I haven't chosen the above numbers randomly;

36.2% is the 2 year return from the XAO over a 2 year time frame ending today (not annualised return) - what most funds are measured against

52% is the 2 year return from the ARG over a 2 year time frame ending today (not annualised return) including dividends.

For those who don't know ARG is a relatively conservative Listed Invetment Company that is similar to a managed fund that only invests in Aus stocks with the added advantage of liquidity and you can invest at lower than NTA (often).

You don't have to identify what your return was but it would be good if people voted in the poll to get meaningful results. My return is slightly less than the XAO for the period.

Cheers,
TJ

 

[Realist]

I assume you include dividends, but take out brokerage, trading fees/subscriptions, and tax?

Then if you wanna be pedantic index it against inflation...

 

[TjamesX]

Just elaborating on the reason for the thread.

I am a relative novice to share investing (only been doing for two years), and am a big fan of LIC's if you would like equity exposure but don't really know what you're doing. However the longer I have been in the market, I have been questioning the realities of investing in the market youself and even with experience can you outperform a good LIC over time and still have a reasonable risk exposure.

Argo (ARG) I have used as an example because they have been around ages and also outperformed the index for ages. They have a low management expense ratio - do not slug you with huge outperformance fees and are competently managed.

The bottom line is LIC's are diversified portfolio's, have low volatility and often have historical outperformance of the index - is it worth your while trying to beat them?????

A few reasons why you may not like LIC's

- You don't really learn a great deal about investing
- Its more fun actually investing in individual stocks
- LIC's are boring
- You like getting more than one annual report a year.....

My hunch is most investors would be financially better off with a set and forget strategy in a few LIC's, but are more attracted to the potential of do it yourself

Cheers,
TJ

 

[dubiousinfo]

I assume you include dividends, but take out brokerage, trading fees/subscriptions, and tax?

Then if you wanna be pedantic index it against inflation...

I'm sure EBIT figures will be fine for a comparison.

 

[TjamesX]

I assume you include dividends, but take out brokerage, trading fees/subscriptions, and tax?

Then if you wanna be pedantic index it against inflation...

Include dividends and brokerage but before tax as the poll is before any tax on profits. but you don't need to be too pedantic, just an approx return will do (and before any indexing to inflation)

Cheers,
TJ

 

[FrankGrimes]

For those who don't know ARG is a relatively conservative Listed Invetment Company that is similar to a managed fund that only invests in Aus stocks with the added advantage of liquidity and you can invest at lower than NTA (often).

I'm planning to buy a parcel of ARG and would like to know how you buy and know when they are below their NTA? Sorry this a basic question, but I'm a buy and hold investor and don't usually focus on the nitty gritty.

However, I'd like to buy at a discount if possible.

Cheers

Grimey

 

[TjamesX]

I'm planning to buy a parcel of ARG and would like to know how you buy and know when they are below their NTA? Sorry this a basic question, but I'm a buy and hold investor and don't usually focus on the nitty gritty.

However, I'd like to buy at a discount if possible.

Cheers

Grimey

You buy via a broker just like any other share investment

At the moment the share price is $7.53. The NTA is provided monthly via ASX announcements - the last on Sept 30 was $6.86, but the market has run up a bit since then. I would say at a guestimate the NTA now would be about $7.15 - 7.30 so they're probably trading at a premium at the moment.

But it is a long term game with these guys - personally i am mostly out of the market as I think it is a bit toppy...... but if want exposure to the overall market but don't know what to buy thes guys are a step in the right direction.

Other LIC's to look at

MLT
AFI
CAM
WAM
....... the list goes on

TJ