LICs, Labor's tax plan, L1 Capital and more

In this week's #AskAlan Facebook Livestream, we talk about LICs, Labor's tax plan, and L1 Capital.  

• How do LIC’s calculate their returns ? The NAOS (ASX: NAC) January Fund Fact Sheet shows a “NAC Investment Portfolio Performance*” of 72.76 %. Yet the share price, which listed in November 2014 at $1, is shown as $1.05. This obviously doesn’t include dividends, but it doesn’t seem to add up to me. Can you find out how this figure is calculated and is it a fair representation of the underlying value and performance of the fund. 

• Looking for a fund with solid returns 7- 8 and reinvestment and a savings plan. I’m currently 64 and will have to work for around 5 years, and I currently have 15k. What about spaceship super?

• I read Alan’s interview with Landau of L1 Capital, and see they're launching their LIC. Dumb question: How do I buy into it?

• The interview with L1 Capital was interesting but I'm interested in your view of the 1.4% fee plus the 20% bonus on a fairly easy watermark. WAM alternatively is a straight 1% (I think) - L1 had better perform!

• Are you optimistic about Ardea? Is it better than LAC? I'm a grandpa loser in biotech and trying to figure a way out. Alternatively, is there a sector other than above that you are most optimistic about and/or perhaps up and coming company?

• I own shares in EXP (they’ve dropped since I purchased ) . I’m tossing up between holding or selling into any upswing. Bennelong are substantial shareholders, but a director has just sold some shares. What’s your assessment of the business?

• I have a question about the new policy being proposed by Labour regarding franking credit.  I have just retired from the workforce and if Labour wins the next election and implements its dreadful policy, it will certainly hit my pocket.  I was wondering if every company gave unfranked dividend (say 100 cents/share instead of 70 cents/share franked dividend), then Bill Shorten won’t get anything from us.  What is your view about it?

• Isn't it the case that a company pays tax in the name of the shareholder for the profit which is then distributed to the shareholders as dividends. So the franking credit makes sure that people with incomes above the starting amount for taxes are not taxed twice. But the ones below the cutoff should get the franking back, because they do not pay any tax on their dividends = profits of their shareholding. There are other countries as well which refund the already paid tax when people’s income is not taxable.

• Shorten's Franking rebate change seems discriminatory. If you have to pay tax, you can have the credit, if you don't, you can't. Will that pass legal objections?

• What are your thoughts on the opposition leader Bill Shorten's wrecking ball policy of abolishing the imputation tax credits system? Could this be the break that Malcolm Turnbull needs to turn the polls given that baby boomers and retirees are the biggest voting block? A lot of Australians enjoy their full franked dividends.

• Do you think you will be able to use franking credits owned by your SMSF to offset tax obligations in a personal share account?

• The LBT Innovations share price has been declining rapidly. Last week the company announced a $7m private placement at 15c per share followed by a Share Purchase Plan for existing shareholders. This is a 25% discount to the price before the announcement. Normally this would sound like a good deal, however now the shares have dropped even lower to 14c, as at yesterday’s close. Do you have any insights into what’s going on at this company? Is this latest drop due to dilution from the new shares being issued?

• What do you think of things like BrickX and Acorns (I think it's only ETFs)?

• Who thinks this is the blow off rally to end our current late stage bull market? Maybe in retrospect we won't see the 20% - 50% gains of previous blow off rallies, but will see that the irrational exuberance was in fact the markets ignoring all of the risky news like trade wars etc.