Sectors: ETFs
Following your comments relating to MVB vs Stocks I wondered about the same being applied to MVR. (acknowledging that MVB is restricted to one sector and MVR is many). I came up with a list of 9 constituent stocks and asked my new best friend Grok to review the list and compare/contrast etc with the ETF and expectations of future outperformance. It came back and basically said Im an idiot. MVR already restricts stock to max 8% and unless Im a fortune teller rejigging the percentage of sector/stocks etc is a pointless exercise and gave another half dozen reasons to abandon this exercise. Any general thoughts on Groks response ?
Dear learned team,
I’m seeking your insights on the implications for the Japanese stock market on Scott Bessant’s US support for the Japanese bond market. I’ve read a lot about how his fairly brazen efforts to lower the high US bond yields can be described as “bringing a knife to a gun fight” but what has changed is that an unhedged Japan fund (IJP – up 13.3% so far this FY) has significantly underperformed a hedged fund (HJPN – up 0.3%) reflecting the changed currency rates. Normally these two funds are a close match or HJPN performs much better, as in 2025 (up 25.6% vs 11.1%) or FY 2025/26 (up 58.7% vs 19.3%. Based on Trump’s entrenched war against Iran and US’s ever enlarging deficit it seems that IJP will continue to grow. But I’m very good at getting these things wrong!
Hi MM,
The average LIC trades at a ~9% discount to pre-tax NTA, although this is heavily skewed by some of the smaller LICs trading at material discounts.
Private credit (PC) is lending provided directly by non-bank investors or funds to companies, rather than through traditional banks or publicly traded bonds. Investors typically receive higher interest rates in return for taking on greater credit risk and lower liquidity. In other words, higher risk, higher reward.
The PM Capital Global Opportunities LIC (PGF) has been a clear standout, delivering almost three times the return of the best-performing ETF over five years, while also holding up relatively well through the 2022 global equity sell-off—highlighting the benefits of its concentrated, value-oriented approach. MFF Capital Investments (MFF) took longer to shine, lagging the ETFs through much of 2021–23 before recovering strongly from 2024, while NDQ delivered the strongest ETF performance but with greater volatility and IVV provided the steadier ride.
The chart below highlights that, in recent years, small-cap LICs have delivered a clear win over ETFs—provided, of course, investors picked one of the better-performing managers. Spheria (SEC) was the standout performer, broadly tracking the SMLL ETF until mid-2024 before accelerating sharply from mid-2025. Emerging Companies (ECL) also delivered steady outperformance.
The performance of the Wilson Asset Management stable highlights why selection matters with LICs.
There are two ways to measure a LIC’s performance, and they can produce very different results, but for us, what matters is the total shareholder return (TSR).
