Ann: Changes to allowable investments, page-23

There is a lot of short term thinking in this list on ALF.  I have been following them since the float, owning them most of that time (not now).  Comparing them with the benchmark is a best effort, but not perfect.  For a start they avoid the miners which makes up a large part of the index.

I work out my own performance numbers because all LICs emphasise their own performance method which means none of them measure it the same way.  They use "portfolio" performance which seems to be measured differently by most LICS.  I am personally more interested in their share price and dividends which incorporates there marketing and capital management prowess as well.  That is my return not the manager's.

Here is how I look at ALF in my spreadsheet.  This is my graph of their performance (my way of measuring) against the ASX300 Accumulation index on a rolling 12 month return measured monthly.  It is the end of month price plus dividends, and new issues impacts.  It does not include options or franking credits.  BTW, it averages 4.6% out-performance of ASX300acc on average which is top 2 (I measure them all).  Remember this is my measurement not the manager's.



Notice how the current under-performance is not that bad compared to the run up to the GFC and the bottom of the GFC.  They really performed in the start of bull market at the bottom of the GFC.  The early under-performance is typical of most LICs when they list (ALF listed Feb 2014 so graph starts 2015).

So we have had 3 years of out-performance and slipped in recent months.  No big deal IMHO.  My guess is the manager stayed in cash or relative short because things looks suspect.  Same for the peak of the GFC run-up.

Also, you can buy the ASX300 Accumulation index using VAS or the ASX200 accumulation using STW.  I swapped from ALF to VAS when their premium to NTA got over 20% (I suspect this is not entirely related to their performance shown above!)  Waiting for a discount to swap back, even if it takes years.

Don't believe anything you read on the internet - do your own calculations.