Whitefield Industrials Limited

Whitefield Industrials Limited (ticker: WHF) is an Australian Listed Investment Company (LIC) listed on the Australian Stock Exchange with the ticker code WHF. WHF focuses on Australian equities and offers investors the opportunity to invest in a diversified portfolio of Australian industrial companies, excluding resource shares. Since its listing on January 1, 1923, WHF has provided investors with exposure to the Australian industrial sector.

WHF's primary investment objective is to generate an investment return exceeding the return of the All Industrials Accumulation Index over the long term. This objective aligns with its investment strategy of focusing on large-cap Australian industrial companies. WHF is managed externally by White Funds Management Pty Ltd and has a market capitalisation of approximately $700 million.

Whitefield Industrials Limited (WHF) has a history spanning over a century since its listing in 1923. With a track record of a hundred years, WHF has been a longstanding presence in the Australian market. As of now, WHF has a market capitalisation of approximately $700 million, reflecting its position as a significant LIC in the Australian equities space.

Investors considering WHF can benefit from exposure to a diversified portfolio of Australian industrial companies, with a focus on large-cap entities, aligning with its long-term investment objective.

When assessing Whitefield Industrials Limited (WHF) as an investment option, several key metrics should be considered:

• Long Term Performance: analyse whether WHF has consistently outperformed the All Industrials Accumulation Index over the long term, aligning with its objective of generating superior returns. Historical performance can provide insights into the fund's ability to achieve its investment goals.
• Dividend Reliability: Examine WHF's track record of maintaining dividend payments, as reflected in its net dividend yield of 4.10% and gross dividend yield of 5.80%. Stable dividend payments can be attractive to income-focused investors.
• Underlying Holdings: Gain insight into WHF's underlying portfolio holdings, which primarily consist of Australian industrial companies. Understand the composition of these holdings and evaluate whether they align with your investment objectives and risk tolerance.
• Fees: Consider the cost of investing in WHF by evaluating its Management Expense Ratio (MER), which was calculated to be 0.4% in 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 WHF) 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).