MGG (trust) v MGE (global fund), page-3

Hi Dewy90,

In relation to the question are there any structural reasons why one has an advantage over the other with regards to "total return".

One of the biggest structural differences is MGG is closed ended listed investment trust. It is not subject to ongoing applications and redemptions of the units on issue. This is why it can fluctuate between a premium or discount to NAV. This will have a marked impact on total return. 

MGE is an open ended investment vehicle which trades at or very close to NAV. This is due to the investment vehicle being open to applications and redemptions. Authorised market makers are able to ensure the units don't deviate heavily from the NAV. Some people view this as a positive... as they can sell their units at a fair price to NAV and not be subject to selling at a heavy discount.

In relation to the questions of which one is more advantageous... as always the answer is it depends.

Usually people falling in one of two camps. They either love closed end vehicles or hate them. If you take a look at an overview of most LICs you will see they are constantly plagued by discounts to NAV... this is a real issue with the investment type.

On the other hand they have unquestionable benefits over open vehicles... and when trading at a premium like MGG and most of the Wilson funds.. people cheer.