Summary: As I expose on this blog, virtually all ASX Closed End Funds (CEFs) should be eliminated; they have no defensible basis to continue existing. CEF boosters claim ASX LICs and LITs have a healthy future and will always exist. CaptiveCapital is the only site warning of their coming implosion, the speed of which depends primarily on how high their Total Expense Ratio is. Almost all ASX equity CEFs only exist because of the selling commissions financial planners and brokers received to put clients into them. These were finally banned in July 2020 and that marked the death knell of the industry as, after expenses, almost all sink into significant underperformance. Unlike before, shiny new ones can't replace the failures, so the whole ASX equity CEF sector is doomed to spiralling discounts.

In this post, I accurately track the elimination of ASX Closed End Funds since July 2020. The ASX's inaccurate list of remaining ones is shrinking. The financial services industry still tries to hide the speed of the decline. The danger for current investors now is that many ASX CEFs (and almost all of the ones with net assets under $150m) have entrenched major holders who've accumulated blocking stakes so they can hang on to the fees. These CEFs are still abject failures, but failure won't be winding up in the near term, it will just be massive discounts.

Scrap 'em and stack 'em. ASX CEF failures are memorialised here

Details:

Jan 2024 Status:

- 35 out of 123 ASX CEFs have delisted since July 2020.

- Only 5 ASX CEFs have launched since July 2020 and apart from WAR (a Wilson Asset Management fund), none raised significant capital. Only 1 - HCF in Oct 2022 - launched since Dec 2021!

Total Shareholder Return (which include the discounts they trade at) for the 5 CEFs that launched since July 2020 (as of 1 Jan 2024):

SB2: Salter Brothers Emerging Companies; Listed 16/06/2021; TSR: -17.1% annualised

WAR: WAM Strategic Value; Listed 28/06/2021; TSR: -4.45% annualised

TVL: Touch Ventures; Listed 28/06/2021; TSR: -53.2% annualised

CDO: Candence Opportunities Fund; Listed 19/11/2021; TSR: -15.6% annualised

HCF: H&G High Conviction; Listed 25/10/2022; TSR: 1.8% annualised. (VAS delivered a 15% CAGR since 25 Oct 2022, so underperformance was still enormous). Also, note buyside liquidity is abysmal for HCF and the TSR would be considerably lower at a clearing price to exit a significant holding.

Remember, the negative TSRs are compound annualised growth rates (CAGR). The cumulative return of negative CAGR returns is much worse!

CEF boosters, like Geoff Wilson and Affluence Funds Management, keep repeating that one of the appeals of ASX CEFs is the quality of fund managers that list. It's a much smaller universe than Open End (mostly unlisted) funds, but apparently the "quality of managers is tremendous"! Well, how is that narrative playing out since July 2020?! Are the above funds that listed as CEFs high quality? If CEFs still have a bright future, where are the quality new ones listing and raising capital on the ASX? It's Jan 2024, over three years have ticked by. We're still waiting!

Of course, that's just what the financial services industry tells retail holders. More revealing is what they do. WAM Leaders (WLE) is one of Wilson Assets Managements few opportunities to raise capital, as it actually has outperformed slightly after fees (though this isn't indicative of significant alpha as its only existed since 2016). But Geoff Wilson knows he can't raise much more within the existing WLE CEF. So he launched a WAM Leaders unlisted fund aiming to raise up to $1 billion. So much for the superiority of the closed end structure!


List of ASX CEFs eliminated since July 2020, soon to be eliminated or uninvestable:

You'll never hear about most of the ASX CEFs eliminated. Obviously, they are all failures, and the vast majority of the financial services industry depends on the myth of active management, so they bury the failures.

Below is the full list out of 123 (118 at July 2020 plus the only 5 that launched since).

CEF boosters claim the LIC/LIT sector is just consolidating but healthy. But the facts are that 76 out of 123 (over 60%!!) have been delisted or will be delisted soon, or are uninvestable for some reason.

- Category 1: Delisted (35). Including PGG, EAI, MHH, MLT, OZG, WIC, PAF, TGG, WLS

- Category 2: Suspended. Bentley Capital - BEL

- Category 3a: Conversion to Open End (In Progress). FOR, MGF, NBI

- Category 3b: Conversion to Open End (Likely). SEC

- Category 3c: Takeover (Proposed). QVE

- Category 4: Ignore. (Not investable). ZER, HGV, OEQ, BHD, 8IH, AIQ, ECL

- Category 5: Activist Target (In Progress). HM1, PIA, VG1

- Category 6: Sub-scale. FPC, FPP, FSI, GC1, GFL, HCF, IBC, KAT, LRT, LSX, MEC, NAC, NGE, SB2, TCF, NCC, TEK, TVL, WAA, ECP

- Category 7. Structured to self-liquidate (so will eventually Delist). CD1, CD2, CD3

- Category 8. Founders Investment Vehicle. CIN



Delisted since July 2020:

8EC         8IP Emerging Companies Limited

ABW        Aurora Absolute Return Fund

AEG        Absolute Equity Performance Fund Limited

AGM        Australian Governance & Ethical Fund

AIB         Aurora Global Income Trust

ALF        Australian Leaders Fund

APL        Antipodes Global Investment Company

AUP        Aurora Property Buy Write Income Trust

AYF        Australian Enhanced Income Fund

AYK        Australian Masters Yield Fund No4

AYZ        Australian Masters Yield Fund No5

BSN        Bisan Limited

CLF        Concentrated Leaders Fund

CVF        Contrarian Value Fund Limited

EAF        Evans & Partners Asia Fund

EAI        Ellerston Asian Investments Limited

EFF        Evans & Partners Australian Flagship Fund

EGD        Evans & Partners Global Disruption Fund

EGF        Evans & Partners Global Flagship Fund

EGI        Ellerston Gobal Investments Limited

HHY        Hastings High Yield Fund

HML        Henry Morgan Limited

MA1        Monash Absolute Investment Company Limited

MAX        Millinium's Alternatives Fund

MLT        Milton Corporation Limited

MVT        Mercantile Investment Company Limited

OZG        Ozgrowth Limited

PAF        PM Capital Asian Opportunities Fund

PGG       Partners Group Global Income Fund

SVS        Sunvest Corporation Limited

TGG        Templeton Global Growth

URB        URB Investments Limited

WIC        Westoz Investment Company

WLS        WCM Global Long Short Limited


Remaining ASX CEFs (LICs and LITs);

8IH         8I Holdings Ltd (not worth covering on this blog)

ACQ Acorn Captial Investment Fund Limited

AFI         Australian Foundation Investment Company Limited (AFIC)

AIQ         Alternative Investment Trust (not worth covering on this blog)

ALI         Argo Global Listed Infrastructure Limited

AMH AMCIL Limited

ARG Argo Investments Limited

AUI         Australian United Investment Company Limited

BEL        Bentley Capital Limited (suspended; not worth covering on this blog)

BHD Benjamin Hornigold Limited

BKI         BKI Investment Company Limited

BTI         Bailador Technology Investments limited

CAM        Clime Capital Limied

CD1        Cordish Dixon Private Equity Fund I

CD2 Cordish Dixon Private Equity Fund II

CD3 Cordish Dixon Private Equity Fund III

CDM Cadence Capital

CDO Candence Opportunities Fund Limited

CIN         Carlton Investments

DJW Djerriwarrh Investments Limited

DUI         Diversified United Investment Limited

ECL        Excelsior Capital Ltd (not worth covering on this blog)

ECP         ECP Emerging Growth Limited

FGG Future Generation Global Investment Company Limited

FGX        Future Generation Investment Fund Limited

FOR        Forager Australian Shares Fund

FPC         Fat Prophets Global Contrarian Fund Limited

FPP         Fat Prophets Global Property Fund

FSI         Flagship Investments Limited

GC1        Glennon Small Companies Limited

GCI         Gryphon Capital Income Trust

GFL        Global Masters Fund

GVF        Global Value Fund Limited

HCF        H&G High Conviction Limited

HGV Hygrovest Limited (not worth covering on this blog)

HM1        Hearts and Minds Investments Limited

IBC         Ironbark Capital Limited

KAT        Katana Capital Limited

KKC        KKR Credit Income Fund

LRT         Lowell Resources Fund

LSF         L1 Long Short Fund

LSX        Lion Selection Group Limited

MEC Morphic Ethical Equities Fund Limited

MFF        MFF Capital Investments Limited

MGF Magellan Global Fund

MIR        Mirrabooka Investments Limited

MOT Metrics Income Opportunities Trust

MXT Metrics Master Income Trust

NAC NAOS Ex-50 Opportunities Company Limited

NBI         NB Global Corporate Income Trust

NCC NAOS Emerging Opportunities Company Limited

NGE        New Guinea Energy Ltd

NSC NAOS Small Cap Opportunities Company Limited

OEQ Orion Equities Limited (not worth covering on this blog)

OPH Ophir High Conviction Fund

PAI         Platinum Asia Investments Limited

PCI         Perpetual Credit Income Trust

PE1         Pengana Private Equity Trust

PGF         PM Capital Global Opportunities Fund Limited

PIA         Pengana International Equities Limited

PIC         Perpetual Equity Investment Company Limited

PL8         Plato Income Maximiser Limited

PMC Platinum Capital Limited

QRI         Qualitas Real Estate Income Fund

QVE        QV Equities Limited

RF1         Regal Investment Fund

RG8 Regal Asian Investments Limited

RYD        Ryder Capital Limited

SB2         Salter Brothers Emerging Companies Limited

SEC         Spheria Emering Companies Limited

SNC Sandon Capital Investments Limited

TCF         360 Capital Enhanced Income Fund

TEK        Thorney Technologies Ltd

TGF        Tribeca Global Natural Resources Fund

TOP         Thorney Opportunities Limited

TVL        Touch Ventures Limited

VG1        VGI Partners Global Investments Limited

WAA WAM Active Limited

WAM WAM Capital Limited

WAR WAM Strategic Value

WAX WAM Research Limited

WGB WAM Global Limited

WHF Whitefield Limited

WLE        WAM Leaders Limited

WMA WAM Alternative Assets Limited

WMI WAM Microcap Limited

WQG WCM Global Growth Limited

ZER        Zeta Resources Limited

*D20 (Duxton Water) is not strictly a LIC but is often covered as one and it files Monthly NTA reports.


Links:

> Delisted Australia

ASX: Investment Products - LICs