A Listed Investment Company (LIC) is similar to a Managed Fund. The main difference is that investors can buy and sell shares in a LIC on the Australian Securities Exchange (ASX) just like ordinary shares.
Unlike ETFs that track a benchmark, LIC managers are responsible for setting the funds objectives and selecting the investments. Often managers will set investment guidelines (i.e. only invest in companies in the S&P/ASX 200) and will aim to outperform the index by using active investment strategies.
LICs are “closed” investments, so unlike managed funds they don’t issue or cancel new shares as investors come and go. There’s a set number of securities issued and ASX investors transact LIC shares through their stockbroker just like ordinary shares.
Fees are varied but usually higher than ETFs (~1.0% -1.5% of net assets) and it’s common to have a performance fee (~20% of any returns above the specified benchmark).
As at May 2018, there’s over 80 LICs on the ASX.
ASXLICs.com doesn’t provide share price data.
The best website is Market Index.
They have current ASX share prices, company charts and announcements, dividend data, directors’ transactions and broker consensus.
What type of LICs are there?
Most can be classified under four broad categories:
- Australian shares
- International shares
- Private equity funds that invest in unlisted investments
- Specialist funds that invest in special assets or sectors (e.g wineries).
Why select a LIC over an ETF?
The main reason someone would choose a LIC over an ETF is to chase Alpha (the return above a benchmark). This is achieved through the investment strategy of the fund and sometimes through the use of gearing.
ASX LICs (1 May 2018)
Excel (CSV): Download
|8IH||8I Holdings Limited||48,867,100|
|8EC||8IP Emerg Co Limited||36,095,900|
|AEG||Absolute Equity Perf||108,385,000|
|ACQ||Acorn Cap INV Fund||59,414,300|
|AYZ||Amyf Five Limited||59,600,900|
|AYK||Amyf Four Limited||21,909,700|
|AYJ||Amyf Three Limited||13,435,100|
|APL||Antipodes Global INV||427,398,000|
|ALI||Argo Global Limited||254,142,000|
|AUF||Asian Masters Fund||165,886,000|
|AIB||Aurora GLB Trust||3,134,950|
|AQF||Aus GOV INDEX Fund||48,115,400|
|AYF||Australian Enhanced Units FP||19,739,300|
|AUI||Australian United in||1,061,500,000|
|BTI||Bailador Tech INV||96,198,300|
|BST||Barrack ST Invest||16,303,100|
|BHD||Benjamin Horngld Limited||20,290,400|
|BEL||Bentley Capital Limited||9,135,350|
|BKI||BKI Investment Limited||970,852,000|
|BAF||Blue Sky Alt Access||189,890,000|
|CBC||CBG Capital Limited||23,308,500|
|CQG||Contango GLB GTH Limited||90,075,000|
|CIE||Contango Inc Gen Limited||100,088,000|
|CVF||Contrarian Valfd Limited||72,110,700|
|CD1||Cordish Dixon Pef I||75,686,600|
|CD2||Cordish Dixon Pef Ii||114,243,000|
|CD3||Cordish Dixon Pefiii||113,085,000|
|D2O||Duxton Water Limited||79,672,800|
|EGD||E&P GBL Disruption||243,508,000|
|EGI||Ellerston Global INV||99,546,100|
|EMF||Emerging Master Fund||204,517,000|
|FPC||Fat Prophets GBL Limited||45,848,300|
|FOR||Forager Aust SHS FND||173,714,000|
|FGX||Future Gen Limited||413,682,000|
|FGG||Future GLB Invest Co||381,985,000|
|GC1||Glennon SML Co Limited||45,210,100|
|GFL||Global Masters Fund||22,733,100|
|GVF||Global Value FND Limited||156,346,000|
|HML||Henry Morgan Limited||61,381,800|
|IBC||Ironbark Capital Limited||68,629,300|
|LSX||Lion Selection Group||46,541,800|
|LRT||Lowell Res Fund||23,217,100|
|MGG||Magellan Glob Trust||1,568,240,000|
|MXT||MCP Master Income||748,567,000|
|MFF||MFF Capital INV Limited||1,296,850,000|
|MAX||Millinium Alt Fund||7,931,920|
|MEC||Morphic Eef Limited||46,388,800|
|NAC||Naos Absolute Opp||52,536,900|
|NCC||Naos Emerg Opp||75,785,400|
|NSC||Naos SMLCAP Com Limited||147,026,000|
|NGE||NGE Capital Limited||23,590,000|
|PIA||Pengana Int EQU Limited||286,181,000|
|PIC||Perpetual Equity Limited||290,065,000|
|PAI||Platinum Asia Limited||464,405,000|
|PMC||Platinum Capital Limited||566,124,000|
|PL8||Plato Inc MAX Limited||311,451,000|
|PAF||PM Capital Asian Ops||71,518,700|
|PGF||PM Capital Fund||438,637,000|
|QVE||QV Equities Limited||319,622,000|
|RYD||Ryder Capital Limited||44,992,200|
|SNC||Sandon Capital Limited||48,777,200|
|SEC||Spheria Emerging Co||131,348,000|
|TOP||Thorney Opp Limited||140,497,000|
|TEK||Thorney Tech Limited||57,907,900|
|URB||URB Investments Limited||67,461,800|
|VG1||Vgi Partners Global||602,823,000|
|WAA||Wam Active Limited||45,906,600|
|WAM||WAM Capital Limited||1,559,510,000|
|WAX||Wam Research Limited||284,577,000|
|WDE||Wealth Def EQU Limited||105,834,000|
|WGF||Wmark Global Fund||74,326,800|
|WIC||Westoz INV Limited||149,000,000|
|WLE||Wam Leaders Limited||786,521,000|
|WMI||Wam Microcap Limited||196,000,000|
|WMK||Watermark Fund Limited||73,569,300|
|ZER||ZETA Resources Limited||76,374,800|
How do you value a LIC?
LICs by nature seek to outperform a benchmark. As they have a set number of issued shares, the LIC price can trade at either a premium or discount to the pre-tax Net Tangible Assets (NTA) of the fund.
Over time, LICs tend to revert to their mean premium or discount, so it’s important to be aware of where in the investment cycle a LIC is trading.
According to Bell Potter, the investment cycle of a large-cap LIC (market cap > $500m) is different to a small-cap LIC (market cap < $500m).
Large Cap LICs
Tend to trade at a substantial premium to their pre-tax NTA during poor market conditions, and lower premiums during improving market conditions.
It could be argued that investors prefer the safety of large-cap LICs during bearish conditions but consider them “low return” investments during bullish conditions.
Small Cap LICs
Tend to trade at a small discount when investors are confident and large discounts when investors are negative.
Monthly LIC Reports - from Morningstar
Reference data - from Bell Potter