MFF Capital Investments Limited

MFF Capital Investments Limited (MFF) is an Australian Listed Investment Company (LIC) listed on the Australian Stock Exchange (ASX) with the ticker code MFF. Established in 2006, MFF has been actively managing shareholder funds for 17 years. The company specialises in global equities, with a focus on large-cap companies.

MFF Capital Investments operates with an internally managed structure, which means it handles its investments directly without the involvement of an external investment manager

MFF Capital Investments Limited (MFF) has a notable history, having been actively managing shareholder funds for 17 years. Over this period, it has built a reputation as an experienced fund in the LIC landscape.

Currently, MFF Capital Investments has a market capitalisation of approximately $1.6 billion, indicating its presence as a substantial LIC with a focus on large-cap global equities.

When evaluating MFF Capital Investments Limited (MFF) as an investment choice, consider these key metrics:

• Long-term performance: Has MFF delivered after-fee performance at or above its comparison benchmark over the long term (5+ years)?
• Dividend reliability: Does MFF have a long-term track record of maintaining or growing its dividend?
• Underlying holdings: What does MFF invest in? 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? MFF operates with an internally managed structure, which typically results in lower management fees. The calculated Management Expense Ratio (MER) for MFF is 0.38%, signifying relatively low costs for investors.

MFF Capital Investments' dual objectives are to maximize compound risk-adjusted after-tax returns for shareholders and minimize the risk of permanent capital loss. Its focus on global equities, internally managed structure, and emphasis on attractive business characteristics make it an intriguing option for investors seeking global diversification.

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 MFF) 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).