Pengana International Equities Limited

Pengana International Equities Limited (ticker: PIA) is an Australian Listed Investment Company (LIC) focusing on investing in Global Equities. The company has a market cap of approximately $250 million. The company was listed on the Australian Stock Exchange (ASX) on March 18, 2004, and it has been operating for 19 years. PIA primarily focuses on Large Cap investments and uses the MSCI World Total Return Index, Net Dividends Reinvested (AUD) as its performance benchmark. The company has an Externally Managed management structure and is managed by Harding Loevner LP. The primary objective of PIA is to provide investors with an actively managed and diversified portfolio of ethically screened global public companies (35 to 75), with a focus on high quality and durable growth at reasonable prices.

The investment objective of Pengana International Equities Limited (PIA) is to provide shareholders with continued capital growth as well as regular, reliable, and fully franked dividends, which are paid quarterly. PIA achieves this objective by actively managing and maintaining a diversified portfolio of ethically screened global public companies. The company focuses on companies ranging from 35 to 75 in number, with an emphasis on high-quality and durable growth at reasonable prices.

Pengana International Equities Limited (PIA) offers investors an actively managed and diversified portfolio of global public companies, with an added focus of ethical screening. As you consider PIA as an investment option, it's important to understand the key factors that can impact your investment decision:

• Long-term Performance: Evaluate PIA's historical performance over an extended period, typically 5+ years. Assess whether PIA has consistently delivered returns that meet or exceed its benchmark index, the MSCI World Total Return Index, Net Dividends Reinvested (AUD).
• Dividend Reliability: Examine PIA's track record in maintaining or growing its dividends. Consistent and reliable dividend payments are often a significant factor for income-focused investors.
• Portfolio Composition: Research the underlying holdings of PIA's portfolio (usually found in the monthly updates or the most recent annual report), and nsure that the investments made on your behalf align with your investment goals and risk tolerance.
• Fees: Consider the cost of investing in PIA. For LICs on the ASX, MER can vary widely, typically ranging from around 0.15% to 3%. Lower MER values mean lower annual fees for investors. PIA has a calculated MER of 1.58% as of the most recent financial year.

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 PIA) 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).