Powered by MOMENTUM MEDIA
subscribe to our newsletter sign up

SMSF investors’ demand for listed investment companies on the up

One fund manager has reported SMSF demand for LICs (listed investment companies) has “lifted considerably” in the past 12 months.

 

According to Clime Asset Management, the role of “consistent” fully-franked dividends is seen as a major factor in the continued popularity of LICs.

The cost of LICs is also a contributing factor, Clime stated, as is the investment’s “closed-end structure”.

Advertisement
Advertisement

To illustrate, investors can buy or sell shares in the LIC itself rather than shares in its underlying fund. The LIC has a fixed pool of assets that only changes when it issues shares to raise capital or has dividend reinvestment or option plans, Clime said.

“LICs have permanent capital and therefore can invest against the market, [for example,] buy in a falling market,” said Clime’s director John Abernethy.

“Unit funds, on the other hand, are subject to inflows and outflows of capital, which affects their long-term returns. They tend to invest with the market unless they are managed on an absolute-return basis with an ability to hold cash.”

SMSF investors’ demand for listed investment companies on the up
default
nestegg logo
subscribe to our newsletter sign up
FROM THE WEB
Recommended by Spike Native Network
Michael Jenkins - Don't the ATO need and AFSL licence to do that. Also will the ATO performing a fact find and producing a statement of advice to those funds it it.......
Blair Campbell - HHG - I had a brief discussion with someone on Facebook recently.
They insisted that payment of income tax by individuals was 'voluntary'.
I told him that.......
Paul Cunningham - You mean "as the Sydney and Melbourne property markets charge towards their longest price correction" ....
Anonymous - Where does Core Logic get its information? In the early 1990's there was a 2-3 year price correction of up to 50% in Melbourne and Sydney in the.......