Exploring Australian Listed Investment Companies

The table below shows the 30 largest LICs listed on the ASX.

Click the Name to explore the LIC.

Name Ticker Size Listed Focus Cost
Australian Foundation Investment Company Limited AFI $9.1B 1928 Australian Equities 0.14%
Argo Investments Limited ARG $6.7B 1946 Australian Equities 0.16%
MFF Capital Investments Limited MFF $2.1B 2006 Global Equities 0.31%
WAM Capital Limited WAM $1.8B 1999 Australian Equities 1.16%
L1 Long Short Fund Limited LSF $1.8B 2018 Global Equities 1.49%
WAM Leaders Limited WLE $1.8B 2016 Australian Equities 1.14%
BKI Investment Company Limited BKI $1.4B 2003 Australian Equities 0.18%
Australian United Investment Company Limited AUI $1.3B 1953 Australian Equities 0.11%
Diversified United Investment Limited DUI $1.1B 1991 Australian Equities 0.14%
Plato Income Maximiser Limited PL8 $917M 2017 Australian Equities 0.94%
PM Capital Global Opportunities Fund Limited PGF $826M 2013 Global Equities 1.19%
WAM Global Limited WGB $825M 2018 Global Equities 1.42%
Carlton Investments Limited CIN $782M 1928 Australian Equities 0.08%
Djerriwarrh Investments Limited DJW $775M 1995 Australian Equities 0.44%
Mirrabooka Investments Limited MIR $630M 2001 Australian Equities 0.60%
Whitefield Industrials Limited WHF $615M 1923 Australian Equities 0.46%
Hearts and Minds Investments Limited HM1 $592M 2018 Global Equities 1.83%
VGI Partners Global Investments Limited VG1 $558M 2017 Global Equities 1.68%
Future Generation Global FGG $522M 2015 Global Equities 1.13%
Future Generation Australia FGX $480M 2014 Australian Equities 1.15%
Perpetual Equity Investment Company Limited PIC $455M 2014 Australian Equities 1.36%
Platinum Capital Limited PMC $388M 1994 Global Equities 1.37%
Regal Asian Investments Limited RG8 $366M 2019 Asian Equities 1.63%
Argo Global Listed Infrastructure Limited ALI $360M 2015 Global Infrastructure 1.44%
AMCIL Limited AMH $337M 2000 Australian Equities 0.67%
WAM Microcap Limited WMI $323M 2017 Australian Equities 1.27%
Platinum Asia Investments Limited PAI $314M 2015 Asian Equities 1.43%
Pengana International Equities Limited PIA $305M 2004 Global Equities 1.49%
WAM Research Limited WAX $249M 2003 Australian Equities 1.38%
Cadence Capital Limited CDM $225M 2006 Global Equities 1.26%

About Listed Landscape

Listed Landscape aims to provide independent, transparent, and easy to understand information about Australian Listed Investment Companies. We primarily serve Australian individual investors, mainly self-managed superfund retirees.

We pride ourselves on being 100% independent and exist to serve the reader/ investor. We don’t take payments or advertising from product issuers or financial advisors.

We don’t and won’t promote or favour one LIC over another. Our goal is to present the information in easy to understand and standardised formats, so that our readers can make informed and confident decisions about the LICs they wish to invest their hard earned money into.

Listed Landscape focuses on Listed Investment Companies for two reasons:

  1. We believe it to be the optimal fund structure for investors who want a reliable and steady income from the equity portion of their overall investment portfolio.
  2. We found there was a lack of easy-to-understand and standardised information out there in the industry (that was also independent).

More information on reason 1 above:

  • Listed Landscape is not opposed to other structures (ETFs, LITs, unlisted Managed Funds, or direct stock selections). It is dependent on the goals and mindset of the investor. If the investor’s objective is a reliable income stream to fund their lifestyle (most likely a retiree), and doesn’t want the time requirement or emotional swings of individual stock selection, then Listed Landscape’s view is that LICs are the optimal fund structure for that investor.
  • The primary reason for this is that LICs are ‘company structures’, rather than ‘trust structures’ (as is the case for ETFs and managed funds). Because LICs are company structures, the retained profits (and franking credits) can be stored on the LICs balance sheet, and distributed out to shareholders in a reliable and steady format. Trust structures legally aren’t able to do this. They must distribute all income and capital gains to shareholders each financial year. This results in volatile distribution payments, which has taxation and also emotional mindset implications.
  • Listed Landscape believes that if the correct LICs are chosen to add to a portfolio, the investor can have a wonderful and comfortable emotional mindset about the equity allocation of their overall investment portfolio. Rather than worry about what markets are doing, or whether their balance is going up or down, they can simply budget the expected annual dividend payment, and plan their lifestyle accordingly.

A Listed Investment Company (LIC) is one type of investment fund structure. Other types of investment funds include Exchange Traded Funds (ETFs) (which can be both actively managed or passive), Listed Investment Trusts, or Managed Funds.

The different structures have their own positives and negatives, which are dependent on the goals of the investor.

Some of the benefits of the LIC structure, which Listed Landscape focuses on, include:

  • It's a closed-end investment vehicle: Meaning the manager has a fixed pool of capital to invest with a long-term mindset, and doesn't have the risk of fast redemptions by investors in a time of market panic.
  • They can smoothen out income to the investors: Which can be beneficial for both tax efficiency and emotional mindset, due to being able to retain profits over time (as compared to the trust structure, which must distribute income and crystallised capital gains to the investor in that financial year).
  • The income will most likely be in the form of fully franked dividends: Which is an attractive form for Australian retirees due to the franking system in Australia. Since LICs are companies themselves and pay tax in Australia on profits, they receive franking credits paid on the tax they pay, in addition to the franking credits they receive from their investment portfolio. Well-managed LICs ensure their franking credit reserves are sufficient to pay future fully franked dividends.

It’s important to carefully review a LIC before making an investment decision. The investment strategies and operational strategies vary widely across the industry. Here are the metrics that Listed Landscape believe are important to review and compare:

  • Long term performance: Has the LIC delivered after-fee performance at or above its comparison benchmark over the long term (5+ years)?
  • Dividend reliability: Does the LIC have a long term track record of maintaining or growing its dividend?
  • Underlying holdings: What is the investment strategy of the LIC? LICs on the ASX invest in a wide array of assets, including large or micro cap equities, infrastructure, property, fixed income, and more. The investor should look inside the underlying holdings, and be comfortable with the investments the LIC would be making on their behalf.
  • Fees: How 'expensive' is the fund for the investor? The common ratio quoted for this is the 'Management Expense Ratio,' which divides the total costs of the fund by its net tangible assets. For LICs on the ASX, this can range between the very low of around 0.15%, up to a high of 3%. 0.15% would mean $1.5 of fees per year for every $1,000 of funds the investor has invested (whereas 3% would mean $30).
  • Director & Investment Management integrity: This is difficult to assess, but critical to get a feel for. Are the Directors and Investment Managers serving the investors, or themselves (via fees)? Does the LIC have a high-integrity management and performance fee structure? Do the Directors aim to keep the cost base (the MER) low, or are costs eating away at the returns.