LIC Performance Comparison ARG v AFI

Discussion in 'Shares & Funds' started by Frank Manno, 4th Apr, 2020.

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  1. Frank Manno

    Frank Manno Well-Known Member

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    Hey everyone,

    I did a comparison of both ARG and AFI and was hoping some of you hear can look over it for me to make sure it's in order.

    Its pretty straightforward but you never know maybe I'm missing out on something hence why I'm posting here in case there's something else I should be considering in my comparison.

    So according to these charts, AFI is the winner.. Please click on thumbnail


    ARG v AFI 2 Year Chart
    2 Year.jpg


    ARG v AFI 5 Year Chart
    5 Year.jpg

    -Frank
     
  2. number 5

    number 5 Well-Known Member

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    Yes Frank if you bought AFI 2 years ago or 5 years ago it would have performed better than ARG. That means absolutely nothing in regards to what you should buy today though.
     
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  3. Frank Manno

    Frank Manno Well-Known Member

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    Yes understood, I just wanted to make sure i wasn't missing anything.

    Thanks


    -Frank
     
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  4. Frank Manno

    Frank Manno Well-Known Member

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    ..actually @number 5 ,

    How -do- you decide on what to buy today though if past performance history means nothing (which I realise it doesn't)

    I know this is a complicated question, but is it a case of looking at the companies financial health / fundamentals etc?

    -Frank
     
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  5. Redwing

    Redwing Well-Known Member

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    Darts on a dartboard

    [​IMG]
     
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  6. Anne11

    Anne11 Well-Known Member

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    You can have a read at Snowball post:
    You searched for AFI vs arg - Strong Money Australia

    I bought both.( Does not mean you should)
     
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  7. The Falcon

    The Falcon Well-Known Member

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    These are both “value light” style investors that are unlikely to beat the index over the long term. So unless you are buying at a significant (10%+) discount or you have some particular aversion to buying the index why bother.
     
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  8. number 5

    number 5 Well-Known Member

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    Already answered above by others. I am the same, I buy index funds and ARG.
     
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  9. Nodrog

    Nodrog Well-Known Member

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    Same here. Gives choice in a number of ways - NTA discount, Tax Loss harvesting, potential dividend reliability / smoothing, a different approach etc. Have come to the conclusion ideally only a single LIC “with good liquidity’” is sufficient for such purposes.
     
  10. Frank Manno

    Frank Manno Well-Known Member

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    Thank you everyone for your help as always. I'm leaning towards buying a bit of both actually.

    I want to ask something, when a performance chart measures 'Growth' and 'Distributions' of an LIC, or a Stock or an ETF what is it measuring to determine 'Growth'. s it growth in the company itself or just share price growth?

    Does Growth = Share price growth on performance graphs?


    -Frank
     
  11. Anne11

    Anne11 Well-Known Member

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    I think it is price increase
     
  12. Frank Manno

    Frank Manno Well-Known Member

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    I was just thinking,

    Does AFI or ARG or any LIC try to beat the index or does it just sit there any do its own thing?

    I'm curious as to why someone would invest in anything that doesn't beat the index.

    I'm just asking this for educational purposes. To make sure I understand what I'm doing..


    -Frank
     
  13. SatayKing

    SatayKing Well-Known Member

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    The index doesn't beat the index for heaven''s sake.
     
  14. The Falcon

    The Falcon Well-Known Member

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    Bloody hell Frank haven't you got an advisor to help you ?
     
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  15. Frank Manno

    Frank Manno Well-Known Member

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    How do you mean? AFI or ARG aren't an index.

    I'm just asking if these LIC's perform better than the index as a comparison.

    -Frank
     
  16. Frank Manno

    Frank Manno Well-Known Member

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    Yes I'm ok , I'm doing well I'm dollar cost averaging in a portfolio put together by my advisor that I am happy with.

    But I want to invest in VAS as well as AFI/ARG..

    But then I questioned myself as in if AFI or ARG don't perform as well as a fund that tracks the index then why don't I just invest more into that fund (ie VAS)

    I thought the purpose/idea of any ETF or LIC was to try to do better than the the index.

    Or is it a case that LICs don't care about the index and just invest in a group of companies that are safe and reliable and provide growth/dividends ??

    -Frank
     
  17. SatayKing

    SatayKing Well-Known Member

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    Frank it does seem to me you are in a continual thinking loop. If you follow through with the statement I made it actually relates to your question.

    Frank: Why I'm curious as to why someone would invest in anything that doesn't beat the index?

    SK: The index doesn't beat the index for heaven''s sake.

    Following the matter through it leads to "Why do people invest in the index?"

    And MOST major ETF's in which a lot of people invest are simply the index, eg, VAS/VGS/STW, A200, IOO, etc, etc.

    LICs aren't the index but some view them as being index huggers which may or may not be true if you look at some entity (LIC) which may hold between 60 and 100 individual shares compared to an ETF which may have between 200 to 300 shares.

    Sheese.
     
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  18. Nodrog

    Nodrog Well-Known Member

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    Thinking is dangerous. Index funds were designed to eliminate having to think:).
     
  19. Frank Manno

    Frank Manno Well-Known Member

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    Ok sorry to confused.

    Can an LIC beat VAS? If not then why would anyone invest in any LIC unless it can beat VAS?

    Sorry for this seemingly stupid question but this brings me to think even if someone sits at home and buys 10-15 stocks then what are they trying to do? are they trying to outperform an index fund?



    -Frank
     
  20. SatayKing

    SatayKing Well-Known Member

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    What to YOU think they are doing it for?