Playing Games with LIC Performance Reporting.

A simple game I used to like playing as a kid was spot the difference.

It is not unusual for ASX Listed Investment Companies (LICs) to play their own version of the game.

Firstly the pic below will bring back some memories of the game in case you have forgotten.

spot diff

Let’s just say that are certain times fund managers like displaying their NTA returns against the indices, and certain times they don’t. Then there are certain times some feel the need to compare returns including the advantage of franking credits.

Below I have plucked out a couple of LICs who recently slightly changed the format of their regular monthly NTA reports.

Milton LIC (ASX:MLT)

NTA Report as at end September 2018


Same LIC’s NTA Report as at end October 2018



NTA Report as at end October 2018


Same LIC’s NTA Report as at end November 2018


I thought this can be a useful post to sit here, and if readers find other examples they can point them out in the comments section throughout 2019. I suspect we will see more creative changes to various monthly NTA reporting formats as the year progresses.

Some will wonder why I have picked out these 2 examples, which happen to be a couple of the most trustworthy LICs I know out there. It is because if we have to examine their performance reporting with a fine tooth comb on occasions to see how they are going, what can we expect from the other 100 plus LICs out there? Remember there are no standardised regulated performance reporting when it comes to LICs.

With the examples above I don’t think there is anything necessarily wrong about how they are presenting their performance numbers with their new formatting. I would prefer to see consistency though whatever the LIC chooses, stick with the same method. It could be a sign however they are feeling a bit under pressure from their numbers versus the benchmark over the last 5 years. Also to some extent regarding their nominal returns. To their credit the current format is still presenting their own numbers net of fees, so they are well ahead of many other LICs in terms of integrity of reporting.

With some LICs I even struggle to locate the performance numbers at all. If you can find CAM & FPC quoting their own since inception numbers then let me know. I would like to think someone can dig them up and I can edit this part of the post, perhaps my eyesight is failing me. Trying to find the performance since inception numbers for some LICs reminded me of another picture style game I enjoyed as a child. That was trying to find the hook in the Jeff Hook cartoons. Like finding the hook, I spent ages trying to find performance returns since inception with certain LICs but are often still searching.

jeff hook.jpg

The performance reporting table for other LICs appear to play games that give me a laugh at times. Take FSI for instance. Gross before fees, taxes and charges for the portfolio numbers. Then the comparison numbers you can take your pick. The bank bill index, or the All Ordinaries Index (i.e. not counting the dividends). I would certainly hope the portfolio beats those over the long term! KAT is another LIC that displays its portfolio outperformance (on their gross returns) over the All Ordinaries Index (not accumulation index, i.e. again not counting the dividends in the index measure).

Please feel free to share in the comments any other amusing performance reporting games you find in the LIC space.


When I last made a blog post in mid-December I mentioned that I was a little uncertain whether a lot of the performance reporting in recent times did a good job reflecting fund manager skill. I felt this way because the largest market in the world had enjoyed a relatively uninterrupted bull run for a decade. Normally looking back a decade captures a cycle including a recession and a bear market. This was not the case a couple of months back, yet things have changed since.

With the heavy market slump in Q4 last year, we might be getting close to a good point in time to evaluate a fund manager’s performance. We can now say a fund manager’s 5 and 10 year return numbers include a mix of different markets, bullish and somewhat bearish as we closed out 2018.

ASX LIC comparison

I encourage readers to take a fresh look come mid-January at the longer term returns, if you can find them of course. Pay attention to the fine print regarding before or after expenses, costs etc. Are they using NTA or share price, are they grossing up returns for franking? Has the marketing department decided to use a fresh approach in 2019 to the formatting that is coincidentally kinder to the look of overall return numbers displayed?

It wouldn’t shock me to see a small cap manager suddenly reference the ASX emerging companies index, after previously comparing itself to the ASX200. It has been very tough in 2018 for smaller companies.

Other numbers I will personally be looking to see some updates soon are global CAPE ratios. I don’t think they are some magic tool for market timing. I do believe they can be handy stats to have in the back of your mind when considering where in the world to search for some value. Assuming like myself you often invest with a very long term mindset.

Perhaps these updated CAPE numbers will now look less worrying than a year ago. With markets having experienced a bit of a shakeout I am comfortable carrying more normal cash levels in my portfolio. A year ago I remember discussing some nervousness surrounding some rapid rises in bitcoin, emerging market stocks, FANG stocks, and even some of the riskier “thematic” stocks on the ASX. 2018 saw a healthy reality check in deflating the value of many such areas.

As a result I think there is a little less to worry about in markets in 2019. I would probably want the decline we have seen from market tops to be in the order of 25-30%, rather than around 10-15% across world equity markets currently though. Then I think I could start to get genuinely excited over a lot of new buying opportunities.


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If you don’t already subscribe to Sharesight’s paid services, their portfolio performance reporting software may assist in some ways to analysing what is a more realistic version of a LIC’s performance. If you are interested, they are kindly offering the readers of this blog two free months off your new subscription. You need to use the below link to qualify. (Disclosure this website is an affiliate marketer for Sharesight).

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9 thoughts on “Playing Games with LIC Performance Reporting.”

  1. Franking credits are an interesting issue as well. The argument being that you need to gross up their (LIC) returns so it’s on a like-for-like basis with unlisted managed funds (which just act as pass-through vehicles so are gross of tax). To my knowledge, a number of sources that report LIC returns do not do this (e.g. Lonsec/Morningstar) which arguably disadvantages LICs on a like-for-like comparison.

    Good read though and it’s crazy but not too surprising how much different managers will try to play around reporting. I recall SNC, for example, talking about net-of-fee reporting at their AGM in 2017 (still not done though…)

    1. Yes it’s a good point about franking credits and I can understand how AFI would want to incorporate that in their performance reporting. What they have done here is more appropriate in many ways. The other side to it is that this issue is not a new one, so one wonders about why they change the format now and not years ago? Also it is rare for other managers to report this way. This could mean some readers quickly glance at their current report assuming that it is not including franking. They may come way thinking they have done better than they actually have.

      Last I heard from SNC is that they didn’t like reporting after fees numbers because there is no requirement for competitors to do the same. I think Wilson are in the same camp. They would prefer it is compulsory to present the numbers after fees but won’t change whilst other managers are still allowed to report them before fees. I think any LICs would be better off presenting them after fees regardless. It helps you stand out as telling the true picture to shareholders. Particularly these 2 who I believe in the long run will have good after fees numbers. They often are running activism campaigns on other companies so I think it would be good from that perspective also, lead by example.

      1. Fair points too in all honesty. I’m surprised there hasn’t been at least some notional effort to guide this niche of the investment industry on good practice but I suppose it hasn’t been viewed as big enough to deserve even that attention. It is interesting to contrast against ETFs though which have been focused on reporting net performance (on a mostly consistent basis).

        Another one that’s tricky to unravel is the impact of options on both NTA and underlying investment performance with mixed reporting (or none at all). APL stood out for that this year and they only started to report quite late relative to option expiry.

      2. It’s all a bit of a mess and often more so when options are involved.

        Yes it looks like APL are being quite upfront with all the info now. As you point out though going back earlier in the year they were using a different format, being a bit quieter about the effects of the options. Some quote a NTA assuming all options would be exercised but I think they chose not to do that earlier on.

        I think most others in their situation right now (lagging the benchmark), would choose to present the numbers in a more flattering way. Eg portfolio pre taxes, fees, other costs and not counting the dilution effects of the options. So they seem to be taking a more realistic approach than most now.

      3. Just noticed CIE lagged their benchmark by about 9% in 17/18. Magically all of a sudden the comparison to the All Ords accumulation index disappeared a few months later from their monthly NTA reports.

  2. Speaking of Contango I noticed something interesting with their international LIC in WQG. The asterisks started appearing on their performance tables in the second half of 2018 all of a sudden. Seems like they are excluding the cash balance from their figures. “The company’s operating bank account balance is excluded from the portfolio value”. I wonder if they would do this if the markets and their portfolio happened to be negative since inception? They do run small cash balances but still seems strange.

  3. ALI look like they are embarrassed about lagging their benchmark since inception. This quarter they now choose to only display 2018 figures where they did ok. Since inception numbers have vanished from the usual quarterly update.

    For the first time they throw in the ASX 200 accumulation comparison, just because that index had a rough time of late.

  4. August 2018 saw EAI introduce a new asterisk where any dilution from options being exercised would be excluded from their numbers. They are also comfortably lagging their benchmark.

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