Trading at a premium?

Not wanting to offend the masses of AFIC, Argo, Milton supporters... but how do these LICs ever trade at a premium.

Over the long term they are little more than index trackers... well for Argo under performing the ASX 200 accumulation index over the 5 year and 10 year mark.

Why would anyone pay a premium for a fund not even meeting the index over the long term?

I don't understand when there are lower cost index funds, ETFs which trade at NAV.

Yes, there are tax benefits to the LIC structure... but it has me stumped. Especially given there are also trade offs for the structure, such as premium/discount shifts.

If meeting the index is your goal; why pay a premium for it when you don't have to?

I will never understand.