These are somewhat important.
Net of fees and Tax Argo vs. Pre-tax & Pre-fee equivalent ETF.
These are somewhat important.
Net of fees and Tax Argo vs. Pre-tax & Pre-fee equivalent ETF.
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Not at all. Your comparison graphs are from January 2011. I said Dec 2011, not January 2011. In January 2011 ARG and AFI were at a slight premium, not a discount. In December 2011 they were at a discount, which is the point you challenged me to prove (that if buying ARG or AFI at a discount, you'll beat the index in the long term). If you run the numbers from 31 Dec 2011 to date: XJO=39.3%, AFI=45.4%, ARG=50.4%. Even better, run the numbers from 31 March 2012 when the discount to NTA was even bigger for both companies, you get XJO=32%, AFI=41.5%, ARG=47.5%, an even bigger spread, exactly as you'd expect:- the bigger the discount, the greater the outperformance, because you're effectively just buying the index but at a discount. Buying AFI or ARG at a 10% discount is like buying $1 index ETF shares for 90 cents each. Great time to buy.
Right now though, they're trading at close to NTA, so you're unlikely to get any major outperformance, but you should still match the index pretty closely (over the long term).
You're complaining about a 0.16% MER? That's less than just about all the ETFs on the market and certainly less than any managed fund. What exactly are you going to passively invest in that has an MER less than 0.16%?
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AFI was never at a 10% disc, even with delayed monthly reporting, there were lots of folk monitoring the LiCs.
http://www.asx.com.au/documents/products/LIC_NTA_December_2011.pdf
Dec11 was 6% disc to pre-tax NTA but 6% prem to post-tax NTA.
http://www.asx.com.au/documents/products/lic_premiums_discounts_to_nta_200706.pdf
Jun11 was also 6% disc to pre-tax NTA... buying that disc wouldnt have ended well
There's also survivorship bias there, lots of the LiCs from 2007 or even 2011 have since closed down
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1) How do you work out the tax component?
2) why pay etf fees?
3)Who prepared the graphs?
http://www.asx.com.au/asxpdf/20170123/pdf/43fgkf7pk3f1zb.pdf
1) Cherrypicking?
2)shares have no MER?, I just press buy and re-adjust every now and then and I don't have to pay .16% for nothing
3)How do you know the discount of the market is justified and when it is not justified
4)XJO does not include dividends
1. Will be dependent on each investor but Corp Tax rate a start.
2. Because the ETF providers charge them. STW for instance charges .19% which is more than Argo.
3. Argo did - http://www.argoinvestments.com.au/portfolio-performance/portfolio-performance
The rolling returns for the years prior where also better than those of last year. If you look at past Annual reports they are provided. 10 year return to 2010 was 10.6% vs. 7.1% for example.
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(1) Cherrypicking??? Mate, seriously. You tried to put up an example using a start date when AFI and ARG share prices were both at a premium to disprove my assertion about performance of those shares when they are bought at a discount. I’ll give you the benefit of the doubt and assume that this was just a simple mistake on your part. You ended up proving my other point that they will underperform the index if bought at a premium, as you did with your initial graphs. I picked two dates where they were at a big discount, feel free to pick any other date where the ARG or AFI share price was at a decent discount to its NTA and run the numbers.
(2) The OP is looking for someone else to look after the investment, not to pick stocks himself. 0.16% is about as cheap as it gets.
(3) The discount is simply the difference between the LIC's share price and its NTA (Net Tangible Assets per share, ie the value of all the different shares that the LIC has invested in divided by the number of shares the LIC has on issue). The assets that make up the NTA for AFI and ARG are shares from the ASX, probably pretty close to the proportions that make up the ASX200. So if the LIC is trading at a discount (share price < NTA) it means you're paying less for a basket of shares that the LIC holds (via the LIC share price) than you would if you bought all the shares in that basket individually (effectively the NTA).
(4) yes, XJO does not include dividends, neither does AFI or ARG in the numbers that I calculated (I used the same source as you, it was just measuring change in share price, not including dividends reinvested).
I was just using 10% as an example to keep it simple. AFI did hit 9.8% discount in June 2005, and over 10% discount in 2000/01. ARG's discount was 9.3% in early 2012 and over 15% in 2001.
I think you mean Jun07 rather than Jun11 (judging by the link you had). Lets face it - buying most stocks in Jun07 didn't end well
That said, AFI and ARG still outperformed the index using Jun07 as the start point.
