The LICs package questionable assets, inflate their price, and sell them to unsuspecting granny investors. The packaged securities in turn are sometimes repackaged and resold at even more inflated prices. The analogies to the financial crisis's problematic mortgage backed securities are obvious. At each step of the securitization chain, the fraudulent asset is revalued at a more inflated price, with the most common overvaluation being to remove the effect of fees and taxes, leaving a fantasy number to be used in company books and as asset-backing for other schemes, and as justification for price fixing. Such chains are also commonly used to obscure the risk profile of indirectly held assets.
LICs most prominently present so-called 'pre-tax NTA' in their fraudulent marketing. This is the NTA in a world without taxes, a fantasy NTA for shilling and not the actual market value of the assets backing the LIC. LIC criminals justify using this deceptive measure because they never plan to sell. But if they never plan to sell an investment, it makes no sense to take advantage of its unrealized untaxed profits. In effect they want to have the cake, eat it, and sell it to grannies. This measure is completely irrelevant, as is 'portfolio return', and since these metrics are used exclusively for securities fraud they have no place in honest disclosure documents.
An LIC's fair value equals its NTA only if the LIC has zero percent costs. This is fact and not opinion, and if the LIC criminals or their 'analyst' shills pretend otherwise, it is a demonstrable lie. An asset's fair value is defined by its net discounted cashflows. An LIC's fair value as proportion of its NTA inversely follows its costs as proportion of its cashflows. If an LIC burns an average 20% of the cashflows produced by its assets, its fair value is 80% of NTA. That costs matter to fair value would seem an obvious conclusion, even for mentally deficient analysts that swallow any fraudulent number submitted by one of the goodfellas.
The most criminal LICs manipulate their prices even beyond an NTA assuming no taxes or fees. These LICs hold stakes in each other, and are used by other financial institutions as collateral and proxies for market exposure, when in reality the LICs do not own purported assets, creating billions of dollars effectively 'loaned' out of nowhere. In effect, this is a form of shadow banking, with similarities to China's euphemistically named 'wealth management products', as new funds for 'investment' can be created at will along the chain.