First of all, do you think LIC's are a good investment if bought at a fair price?
Cadence look good - good performance, high dividend yield, trading at a fair value etc. However I've just discovered they charge a 20% annual performance fee whenever they beat the All Ords (which is pretty much every year). Others like Argo don't charge a performance fee at all.
I'm kind of new to LIC's but first of all where does this 20% charge come from? Is it just withheld from shareholders when it comes time to pay the dividend etc? Do they send a bill or what?
So basically if they didn't charge this 20% I'd go with them for sure, but does this 20% performance charge offset all their other good qualities? It seems excessive...I mean if their portfolio achieved a 10% annual return, they're charging a 20% performance fee?
Cadence Asset Management charges a management fee of 1.00% p.a. on the gross value of the portfolio, and is eligible to receive a performance fee of 20% per annum when fund performance is ABOVE the All Ordinaries Accumulation Index. When the fund peformance is negative but outperforms the All Ordinaries Accumulation Index, no performance fee is payable.
Anyway with all that said, what LIC's do you recommend, if any at all.