News: CTN Contango asset management announces sale of Contago Income Generator Limited, page-19

These guys have performed fairly well over a long period of time. However, the problem most people have is to understand what "performance" means. For example, does it mean:

1. Share price. This does not account for dividends when some LICS are more generous than others and franking is relevant.
2. Share price plus dividends. This does not account for DRPs, SPPs, etc. Sometimes the include franking and sometimes not.
3. NTA per share. This is the actual stock picking ability of the manage after fees are taken out. Its published every month. However, dividends are not accounted for.
4. The portfolio performance (before fees and expenses). Popular for fund managers but those fees and expenses are real and it does not account for new issues of shares.
5. The accounting profit. This does not account for new share issues so its basically irrelevant to investors IMHO.
6. Other weird measures.

The manager naturally picks the one that makes them look best. They are all guilty of that, even the good managers.

For the shareholder it also depends on why you invest. If you are after income then the dividend is an important attribute. If you are long term (like me for a few more years) then its the total return that is more important.

So I better say how I measure performance. I use the published NTA per share plus any dividends (ignoring franking) every month. Then I calculate the average monthly return.

Using the above, CTN shows 0.81% average monthy preformance since April 2004. For comparison and over same period, WAM .76, ALF .84 and AFI .83 - but these have mainly full franking which should be considered. As another comparison, the ASX200 TR has returned 0.74 per month and its franking is roughly the same as CTN (if you buy an ETF like STW).

To get really technical, WAM also has the lowest standard deviation of the above LICs, even lower than the index. Much more reliable. CTN has high standard deviation, which probably puts some people off (it's NTA fluctates much more).

Of course, performance is one thing, but when to buy and sell is a completely different story. Over the longer term the price follows the performance. Watch those discount/premiums to NTA as well.

Warning: If you have read this far, I type in numbers from the anouncements and this is my hobby. I could make errors so don't take my calculations too seriously.