Perpetual Equity Investment Company Limited

Perpetual Equity Investment Company Limited (ticker: PIC) is an Australian Listed Investment Company (LIC) listed on the Australian Stock Exchange. PIC specialises in investing in a diversified portfolio of Australian and global listed securities, with a predominant focus on Australian equities, including both large and mid-cap companies.

PIC's primary objectives are to provide investors with an income stream and long-term capital growth that exceeds its benchmark performance over a minimum investment period of five years.

Perpetual Equity Investment Company Limited (PIC) has been in operation since it was listed on December 18, 2014, and has an approximate market capitalisation of $400 million.

Perpetual Equity Investment Company Limited (PIC) focuses its investments primarily in Australian equities, representing both large and mid-cap companies. As you consider PIC as an investment choice, it's essential to recognise that the company operates as a growth and risk asset within an investor's portfolio.

With this understanding, you can evaluate PIC using several key metrics to make an informed investment decision:

• Long Term Performance: Assess whether PIC has consistently delivered after-fee performance at or above its comparison benchmark, the S&P/ASX 300 Accumulation Index, over the long term, typically spanning five or more years. This analysis helps gauge PIC's ability to generate returns over extended periods.
• Dividend Reliability: Examine PIC's historical track record of maintaining or increasing dividend payments. Consistency in dividend payments can be a significant factor for investors seeking income stability.
• Investment Portfolio: Gain insight into PIC's diversified portfolio of Australian and global listed securities, with a predominant focus on Australian assets. Evaluate how the composition aligns with your investment objectives and risk tolerance.
• Fees: Consider the cost of investing in PIC, with a Management Expense Ratio (MER) calculated at 1.68%. Assess the impact of these fees on your investment returns over time.

These metrics provide valuable information for investors when assessing PIC as part of their investment strategy. It's crucial to evaluate these factors thoughtfully, taking into account your financial goals and risk preferences.

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 PIC) 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).