Qualitas: A new opportunity in fixed income
Independent Investment Research has issued a report on Qualitas Real Estate Income Fund a newly established investment trust seeking to raise funds and list on the ASX. Show More
Listed investment trusts providing new opportunities in fixed income
Until recently there have been few opportunities for investors to gain fixed interest exposure by investing in listed investment companies and trusts. The listing of MCP Master Income Trust in October 2017 breathed some new life into the sector and the number of fixed income opportunities continue to grow. In... Show More
WAM Microcap: Leveraging a proven process
IIR is initiating coverage of WAM Microcap (ASX:WMI) a listed investment company that invests in a portfolio of ASX-listed micro cap stocks. The company is managed by Wilson Asset Management which uses its proven research process to select stocks for the portfolio. The Manager has an investment team with considerable... Show More
Listed Managed Investments: Quarterly Review
In its latest Quarterly LMI Market Review, Independent Investment Research (IIR) provides detailed coverage of 49 listed investment companies, listed investment trusts and active ETFs including commentary, investment views and ratings. We have coverage across a number of sectors and investing strategies and provide insight into performance, discounts and premiums... Show More
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Making money from activism
Successful activist investing requires certain skills and capabilities and Independent Investment Research believes that Sandon Capital has proven itself capable in this regard. Sandon Capital Investments (ASX:SNC), a listed investment company managed by Sandon Capital, invests in a high-conviction, index agnostic portfolio of stocks using the manager’s activist approach. Sandon... Show More
Buoyant markets boost earnings and income for LICs
The reporting season just ended was a good one for the listed investment company sector with most LICs reporting growth in earnings. Of the 31 LICs we cover that paid dividends during the FY2018 period, 26 reported increased earnings whilst only five reported lower earnings. Show More
Opportunities in Undervalued Global Equity LICs
Much has been written about the fact that Australian retail investors’ portfolios are heavily weighted to Australian equities, despite the domestic market representing a very small proportion of global equity markets. It is not difficult to understand the reasons for this home bias given the benefits of the dividend franking... Show More
Listed Managed Investments: Quarterly Review
In its latest Quarterly LMI Market Review, Independent Investment Research (IIR) provides detailed coverage of 47 listed investment companies, listed investment trusts and active ETFs including commentary, investment views and ratings. We have coverage across a number of sectors and investing strategies and provide insight into performance, discounts and premiums... Show More
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13 LICs at a discount
In its latest LMI Monthly Update Independent Investment Research discusses why LICs trade at a discount to NTA and highlights 13 LICs trading a discount of more than 5% to pre-tax NTA. It discusses some of the reasons LICs trade at a discount and looks at some potential catalysts for... Show More
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12-month LIC returns remain positive despite falls in March quarter
In its latest Monthly LMI Update, Independent Investment Research takes a look at listed managed investment returns for the past quarter and 12 months and highlights the best performing LICs/LITs over the past five years. We also highlight the five largest discounts and premiums to pre-tax NTA and take a... Show More
Wilson Asset Management enters the global equities arena
Wilson Asset Management has launched the offer for its new global listed investment company, WAM Global Limited. The LIC will invest in a portfolio of international equities utilising its proprietary Research-Driven and Market-Driven stock selection processes. Whilst Wilson Asset Management does not have a track record in global equities, WAM... Show More
10 high yield LICs
In its latest LMI Monthly Update, Independent Investment Research takes a look at the recent listed investment company reporting season which saw a majority of LICs report higher earnings and many pay higher dividends to their shareholders. We also highlight the top 10 yielding LICs under our coverage and discuss... Show More
MCP Master Income Trust: A focus on fixed income
Independent Investment Research has initiated coverage of MCP Master Income Trust (ASX:MXT), a listed investment trust that invests in a diversified portfolio of loans to Australian companies. It does so through investments in several wholesale funds managed by Metrics Credit Partners (MCP), an Australian debt-specialist fund manager with significant direct... Show More
Listed Managed Investments: Quarterly Review
In its latest Quarterly LMI Market Review, Independent Investment Research (IIR) provides detailed coverage of 43 listed investment companies, listed investment trusts and exchange traded managed funds including commentary, investment views and ratings. We have coverage across a number of sectors and investing strategies and provide insight into performance, discounts... Show More
Antipodes Global Investment Company: A LIC with a well-managed portfolio of global equities
Independent Investment Research has initiated coverage of Antipodes Global Investment Company (ASX:APL) a listed investment company that invests in a relatively concentrated long/short portfolio of global equities. Many domestic investors exhibit a home country bias, with Australian investor preferences often biased towards products and services that depend substantially on the... Show More
Listed managed investments: 2017 in review
2017 was a good year for global equity markets and this was reflected in the performance of listed managed investments, with those focused on international equities delivering the best returns. With global markets now displaying greater volatility and some major falls over the past week, performance of individual LMIs in... Show More
Plato Income Maximiser: A LIC that pays monthly dividends
Plato Income Maximiser (ASX:PL8) is a listed investment company that aims to provide investors with regular income by investing in a portfolio of Australian large and mid-cap equities. PL8 was listed in May 2017, but the underlying Plato Fund, managed by Plato Investment Management, has a six year track-record. Over... Show More
Listed Managed Investments: Quarterly Review
In its latest Quarterly LMI Market Review, Independent Investment Research (IIR) provides detailed coverage of 42 listed investment companies, listed investment trusts and Active ETFs including commentary, investment views and ratings. We look across a number of sectors and investing strategies and provide insight into performance, discounts and premiums to... Show More
A big year for LICs
2017 was an exceptional year for new listed investment company and listed investment trust raisings, with 14 new entities raising a total of $4.2bn via initial public offers. This significantly exceeded the funds raised by new LIC/LIT offers in the previous two years and lifted the total number of LICs... Show More
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International LICs Performing Strongly
In its latest Monthly Listed Managed Investments Update, Independent Investment Research looks at the performance of listed investment companies and listed investment trust for the 12 months to 30 September 2017 and found that LICs with an international focus were the best performers, with one LIC delivering a portfolio return... Show More
Hi Anthony, Thanks for your question and your interest in our research. A listed investment trust (LIT) is closed ended meaning it has a fixed pool of capital like a LIC. This means the manager doesn’t have inflows or outflows to consider and can focus more on managing the portfolio without thinking about the need to invest new moneys or meet redemptions. Active ETFs, like passive ETFs, are open ended meaning the amount of money under management will rise or fall depending on new fund inflows and outflows. The manager has to issue new units for inflows and redeem units for outflows which may interfere with the efficient management of the investment portfolio. In the case of the active ETF, there is a market maker so this means the unit price should trade close to net asset value, whereas LITs can trade at discounts and premiums, just like LICs. Hope this helps.
Hi Peter, Thanks for your comment and your interest in our research. A few points in response. 1. Of the 49 LICs/LITs in our report, only 21 have been listed for 5 years or more and thus have five year track records, so it is perhaps a little misleading to say that only six of the 49 have outperformed as it implies the remaining 43 have underperformed. This is not the case. 2. Not all of the 21 LICs/LITs should be compared with the S&P/ASX All Ordinaries Index. A benchmark relevant to their investment universe is more appropriate. When we compare the performance of the 21 LICs/LITs with a 5 year plus performance history, eight met or exceeded benchmark and 13 underperformed benchmark over the five years. 3. It is important to note that, depending on their investment mandates, actively managed funds will underperform in certain markets and outperform in others. As an example, some of the larger Australian Shares LICs/LITs deliberately underweight the resources sector and so can be expected to underperform during periods of resources market strength. This has happened over the past few years. For many of these LICs/LITs we believe a 10 year period is a better indicator of performance as it covers a full market cycle. 4. 19 of the LICs/LITs in our report have 10 year plus track records. Of these, 13 have matched or beaten their relevant benchmark over the period and six have underperformed. So, whilst it is true that some LICs and LITs have underperformed, a majority have outperformed – some, quite significantly. This highlights the importance of selecting well managed LICs/LITs that have a solid performance track record. 5. ETFs, LICs and LITs all have a place in the investment universe and it is up to individual investors to decide what best suits their own needs. Hope this helps.
Hi Tony, All the LIC's and LITs in the report are closed ended, but there are two Active ETFs in the report - K2 Australian Small Cap Fund (KSM) and Switzer Dividend Growth Fund (SWTZ). As ETFs, these funds are open-ended.
Hi Ben, Yes this is the latest quarterly report. Once all data has been released by the various LICs for the end of June, we will start preparing the June Quarter Report. Our latest monthly report (June) has just been published today. Regards, Peter.
Hi Chez, Thanks for your question. A subscale LIC trading at a large discount could most certainly be a target for a takeover and liquidation scenario. If the LIC is externally managed, liquidation might require co-operation of the manager, depending on management agreement arrangements. We have seen activists move in on underperforming and discounted LICs in the past. Regards Peter
Hi Graeme, Thanks for you comment/question. I did submit a response to this question last time, albeit with a delay over the Christmas/New Year holiday. So, I'm sorry if you did not see this response. My comments were as follows: "The entities that are noted as “Not Rated” in our Monthly LMI Update are those entities that do not participate in our LIC research scheme but for which we simply provide base information. Importantly we do not have a view on these LICs and therefore there is no rating ascribed. Our LIC research rating scheme applies to those managers who participate in our quarterly rating process. For these participants we collect detailed data on a quarterly basis which underpins their rating. Where it is likely that we may rate an entity as Not Recommended, the Manager has the right to not go ahead with publication and to not participate in our research scheme. In such instances we notify ASIC. These entities will also appear in our tables as Not Rated." For you information, we have also introduced a new rating "Investment Grade" for entities that might not meet our requirements for a Recommended rating but we still consider worthy as an investment.. This hasn't been used yet but gives us an additional rating option. I hope the above helps. Peter
Hi Graeme, Thanks for your question and our apologies for the delay in responding to you due to the Christmas/New Year break. The entities that are noted as “Not Rated” in our Monthly LMI Update are those entities that do not participate in our LIC research scheme but for which we simply provide base information. Importantly we do not have a view on these LICs and therefore there is no rating ascribed. Our LIC research rating scheme applies to those managers who participate in our quarterly rating process. For these participants we collect detailed data on a quarterly basis which underpins their rating. Where it is likely that we may rate an entity as Not Recommended, the Manager has the right to not go ahead with publication and to not participate in our research scheme. In such instances we notify ASIC. These entities will also appear in our tables as Not Rated. I hope this answers your question.
On A big year for LICs -