Future Generation Global

Future Generation Global (ticker: FGG) is an Australian Listed Investment Company (LIC) listed on the Australian Stock Exchange. FGG focuses on global equities and stands as an investment vehicle that provides investors exposure to a select group of prominent fund managers, all dedicated to global equities, within a single investment vehicle. Since its listing on September 10, 2015, FGG has been serving investors while also supporting not-for-profit organizations dedicated to promoting wellbeing and preventing mental ill-health in young Australians through annual donations equal to 1.00% of its net tangible assets.

FGG's primary investment objective is to provide shareholders with long-term capital growth. The company operates under external management, offering investors expertise from leading global equities fund managers.

Future Generation Global (FGG) has been operating for eight years since its listing in 2015. During this period, it has facilitated investments in global equities while contributing to charitable causes focused on the wellbeing and mental health of young Australians. As of now, FGG has a market capitalisation of approximately $450 million, reflecting its presence as a LIC dedicated to both investors and supporting important social causes.

Investors considering FGG can benefit from its unique approach, which combines exposure to global equities through renowned fund managers with philanthropic efforts to support mental health initiatives.

Future Generation Global (FGG) primarily invests in global equities, which are considered growth-oriented and carry inherent risk. It's essential to recognise that FGG itself operates as a growth and risk asset within an investor's overall portfolio. While FGG's unique structure allows for the smoothing of income and the potential for consistent dividends, it's important to note that dividend payments are not guaranteed, and unforeseen market events may lead to adjustments in future payments.

With this understanding of FGG's risk profile, investors should consider several important metrics when evaluating it as an investment choice:

• Long Term Performance: Assess whether FGG has delivered consistent after-fee performance at or above its comparison benchmark, the MSCI All Country World Index in AUD, over the long term, typically spanning five or more years. This analysis helps gauge FGG's ability to generate returns over extended periods.
• Dividend Reliability: Examine FGG's historical track record of maintaining dividend payments. Consistency in dividend payments can be a significant factor for investors seeking income stability.
• Investment Approach: Gain insight into FGG's approach, which involves accessing global equities through a group of prominent fund managers. Evaluate how this strategy aligns with your investment objectives and risk tolerance.
• Fees: Consider the cost of investing in FGG, taking into account the Management Expense Ratio (MER) at 1.09%. Notably, FGG allocates 1.00% of its net tangible assets annually to support wellbeing and mental health initiatives.

These metrics provide essential information for investors when assessing FGG as part of their investment strategy. It's crucial to evaluate these factors thoughtfully, considering both financial goals and the positive impact of your investment on mental health causes.

A Listed Investment Company (LIC) is one type of investment fund structure (i.e. shareholder funds pooled together and invested together, either actively by a manager, or passively). 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 and their own individual investment structure.

Some of the benefits of the LIC structure (the structure of FGG) 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 crystallized 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 (see 'franking reserves' chart above).