Benefits of investing in LIC
Listed Investment Company (LIC) is a popular investment option for investors in ASX. Generally speaking, LICs are suitable for investors who have longer investment time frame. As a matter of fact, many Listed Investment Companies take the value investing approach. Also you might find their performance mirrors stock market. When the market goes up or down, so are the LICs. Some LICs has been around for many years and their performance are consistently trace the market index.
A LIC works similarly to a managed fund, but you buy shares of the LIC on the stock exchange rather than units. The LIC invests in a variety of other businesses, allowing you to diversify your portfolio with only one purchase. That is one of the greatest benefits of buying LIC: diversification. It is not realistic to use your own money to buy so many companies. But buying LIC can help you achieve that indirectly.
Since LICs typically have low management expense ratios, they can be a relatively cost-effective way to invest.
A lot of them have consistent dividend payment history which attract dividend investors. If a LIC pays dividend, it is quite often they offer dividend reinvestment plan, enabling you to take advantage of the power compound interest.
LIC Fees
In terms of fees involved, there are two types for fees involved when you invest in LIC,namely management fee or MER and performance fee. Not every listed investment company charges performance fee and their management fee varies quite a lot range from 0.1% to 3%.
How to invest LIC?
It is quite easy to buy and sell LICs. LICs can be bought and sold on the ASX, through a broker, or through an online share trader, just like ordinary shares. Bear in mind, for smaller LIC, liquidity could be an issue, which means it may take longer to buy and sell and the spread could be higher than big LICs with a lot of interest from investors.
Top 10 LICs in ASX
Here are top 10 LIC in terms of market capitalisation in ASX:
- Australian Foundation Investment Company Ltd (AFI)
- Argo Investments Ltd (ARG)
- Milton Corporation Ltd (MLT)
- Magellan Global Trust (MGG)
- MFF Capital Investments Ltd (MFF)
- WAM Capital Ltd (WAM)
- MCP Master Income Trust (MXT)
- BKI Investment Company Ltd (BKI)
- Australian United Investment Company Ltd (AUI)
- Diversified United Investment Ltd (DUI
Complete LIC list
| Code | Company | Market Cap (Mil) | Asset | Management Fee | Performance Fee |
|---|---|---|---|---|---|
| 8IH | 8I Holdings Ltd | 75 | Equity - Asia Pacific ex Japan | n/a | n/a |
| ACQ | Acorn Capital Investment Fund Limited | 115 | Equity - Australia Small/Mid Cap | n/a | n/a |
| AEG | Absolute Equity Performance Fund Limited | 94 | Equity - Australia Strategy | n/a | No |
| AFI | Australian Foundation Investment Company Limited | 9,058 | Equity - Australia | 0.18% | No |
| AIB | Aurora Global Income Trust | 0 | Equity - Global | 1.33% | No |
| AIQ | Alternative Investment Trust | 32 | Equity - Global Strategy | 0.75% | n/a |
| ALI | Argo Global Listed Infrastructure Limited | 309 | Equity - Infrastructure | 1.20% | No |
| AMH | AMCIL Limited | 316 | Equity - Australia | 0.77% | No |
| APL | Antipodes Global Investment Company Limited | 504 | Equity - Global Strategy | 1.13% | Yes |
| ARG | Argo Investments Limited | 6,256 | Equity - Australia | 0.18% | No |
| AUI | Australian United Investment Company Limited | 1,107 | Equity - Australia | 0.13% | No |
| AYF | Australian Enhanced Income Fund | N:A | Equity - Australia Strategy | n/a | n/a |
| BAF | Blue Sky Alternatives Access Fund Limited | N:A | Equity - Australia Strategy | 1.20% | Yes |
| BEL | Bentley Capital Limited | 7 | Equity - Australia Small/Mid Cap | n/a | Yes |
| BHD | Benjamin Hornigold Limited | 6 | Equity - Global Strategy | 3.00% | Yes |
| BKI | BKI Investment Company Limited | 1,067 | Equity - Australia | 0.19% | No |
| BST | Barrack St Investments Limited | N:A | Equity - Australia Small/Mid Cap | 1.00% | Yes |
| BTI | Bailador Technology Investments Limited | 177 | Equity - Australia Small/Mid Cap | 1.75% | Yes |
| CAM | Clime Capital Limited | 115 | Equity - Australia | n/a | n/a |
| CD1 | CD Private Equity Fund I | 37 | Equity - Global | 0.33% | No |
| CD2 | CD Private Equity Fund II | 63 | Equity - Global | 0.33% | No |
| CD3 | CD Private Equity Fund III | 70 | Equity - Global | 0.33% | No |
| CDM | Cadence Capital Limited | 313 | Equity - Australia | 1.00% | Yes |
| CIE | Contango Income Generator Limited | 75 | Equity - Australia | 0.95% | No |
| CIN | Carlton Investments Limited | 723 | Equity - Australia | 0.10% | No |
| CLF | Concentrated Leaders Fund Limited | 71 | Equity - Australia | 2.40% | No |
| D2O | Duxton Water Limited | 161 | Equity - Australia Strategy | 0.85% | No |
| DJW | Djerriwarrh Investments Limited | 630 | Equity - Australia | 0.39% | No |
| DUI | Diversified United Investment Limited | 1,002 | Equity - Australia | 0.17% | No |
| EAI | Ellerston Asian Investment Limited | 156 | Equity - Asia Pacific ex Japan | 0.95% | Yes |
| FGG | Future Generation Global Investment Company Ltd | 585 | Equity - Global | 1.00% | No |
| FGX | Future Generation Investment Company Limited | 520 | Equity - Australia | 1.00% | No |
| FOR | Forager Australian Shares Fund | 159 | Equity - Australia | 1.88% | No |
| FPC | Fat Prophets Global Contrarian Fund Limited | 51 | Equity - Global | 1.25% | Yes |
| FPP | Fat Prophets Global Property Fund | 18 | Property - Global | 1.03% | Yes |
| FSI | Flagship Investments Limited | 60 | Equity - Australia | n/a | Yes |
| GC1 | Glennon Small Companies Limited | 34 | Equity - Australia Small/Mid Cap | 1.00% | Yes |
| GFL | Global Masters Fund Limited | 21 | Equity - Global | 0.85% | No |
| GVF | Global Value Fund Limited | 194 | Equity - Global | n/a | No |
| IBC | Ironbark Capital Limited | 58 | Equity - Australia | 0.65% | Yes |
| KAT | Katana Capital Limited | 35 | Equity - Australia Strategy | 1.25% | Yes |
| LRT | Lowell Resources Fund | 35 | Equity - Global | n/a | n/a |
| LSF | L1 Long Short Fund Limited | 1,360 | Equity - Global Strategy | 1.44% | No |
| LSX | Lion Selection Group Limited | 52 | Equity - Global | 1.50% | Yes |
| MA1 | Monash Absolute Investment Company Limited | 62 | Equity - Australia | 1.50% | Yes |
| MEC | Morphic Ethical Equities Fund Limited | 57 | Equity - Global Strategy | 1.25% | Yes |
| MFF | MFF Capital Investments Limited | 1,479 | Equity - Global | 1.25% | Yes |
| MIR | Mirrabooka Investments Limited | 536 | Equity - Australia | 0.70% | No |
| MLT | Milton Corporation Limited | 3,103 | Equity - Australia | 0.14% | No |
| MXT | MCP Master Income Trust | 1,304 | Fixed Income - Australian Dollar | 0.86% | No |
| NAC | NAOS Ex-50 Opportunities Company Limited | 46 | Equity - Australia Small/Mid Cap | 1.75% | Yes |
| NCC | Naos Emerging Opportunities Company Limited | 78 | Equity - Australia Small/Mid Cap | 1.25% | Yes |
| NGE | NGE Capital Limited | 21 | Equity - Australia | n/a | n/a |
| NSC | NAOS Small Cap Opportunities Company Limited | 121 | Equity - Australia Small/Mid Cap | 1.25% | Yes |
| OEQ | Orion Equities Limited | 3 | Equity - Australia | n/a | n/a |
| OZG | Ozgrowth Limited | 75 | Equity - Australia Small/Mid Cap | 1.00% | Yes |
| PAF | PM Capital Asian Opportunities Fund Limited | 52 | Equity - Asia Pacific ex Japan | 1.00% | Yes |
| PAI | Platinum Asia Investments Limited | 471 | Equity - Asia Pacific ex Japan | 1.10% | Yes |
| PGF | PM Capital Global Opportunities Fund Limited | 455 | Equity - Global | 1.00% | Yes |
| PIA | Pengana International Equities Limited | 317 | Equity - Global | 1.77% | Yes |
| PIC | Perpetual Equity Investment Company Limited | 425 | Equity - Australia | 1.00% | No |
| PL8 | Plato Income Maximiser Limited | 501 | Equity - Australia | 0.80% | No |
| PMC | Platinum Capital Limited | 438 | Equity - Global | 1.50% | Yes |
| QVE | QV Equities Limited | 224 | Equity - Australia Small/Mid Cap | n/a | No |
| RYD | Ryder Capital Limited | 119 | Equity - Australia Small/Mid Cap | 1.25% | Yes |
| SEC | Spheria Emerging Companies Limited | 126 | Equity - Australia Small/Mid Cap | 1.00% | Yes |
| SNC | Sandon Capital Investments Limited | 97 | Equity - Australia Small/Mid Cap | 1.25% | Yes |
| SVS | Sunvest Corporation Limited | 4 | Equity - Global | n/a | n/a |
| TEK | Thorney Technologies Ltd | 139 | Equity - Global Strategy | 0.75% | Yes |
| TGG | Templeton Global Growth Fund Limited | 286 | Equity - Global | 1.00% | No |
| TOP | Thorney Opportunities Ltd | 105 | Equity - Australia Strategy | n/a | n/a |
| VG1 | VGI Partners Global Investments Limited | 879 | Equity - Global | 1.50% | Yes |
| WAA | WAM Active Limited | 74 | Equity - Australia Strategy | 1.00% | Yes |
| WAM | WAM Capital Limited | 1,871 | Equity - Australia | 1.00% | Yes |
| WAX | WAM Research Limited | 334 | Equity - Australia Small/Mid Cap | 1.00% | Yes |
| WHF | Whitefield Limited | 518 | Equity - Australia | 0.35% | No |
| WIC | Westoz Investment Company Limited | 153 | Equity - Australia | 1.28% | Yes |
| WLE | WAM Leaders Limited | 1,270 | Equity - Australia | 1.00% | Yes |
| WMI | WAM Microcap Limited | 425 | Equity - Australia Small/Mid Cap | 1.00% | Yes |
| WQG | WCM Global Growth Limited | 275 | Equity - Global Strategy | 1.25% | Yes |
| ZER | Zeta Resources Limited | 79 | Equity - Global | 0.50% | Yes |
Note: data on this table is subject to change and may not 100 percent accurate.