LIC Quarterly - December Quarter 2015

In recent times, we have seen the resurgence of the Listed Investment Companies (LICs) sector with a strong flow of new LICs listing on the ASX. In the last 2 years alone, $2.0bn has been raised via LIC initial public offerings (IPO). We believe this growing demand stems from investors increasing interest in listed managed product. LICs are professional managed investment portfolios that offer immediate diversification and access to top quality fund managers, while also being transparent and liquid. At the same time, LICs are also strongly supported by brokers and increasingly used by financial planners post FoFA, as LICs offer varying exposures that compliment an existing portfolio of listed assets and can materially enhance risk adjusted outcomes for clients. Nearly all the LICs that are listed on the ASX, come with an attaching bonus option. These options tend to expire 18 to 24 months after issue. A large number of these bonus options are due to expire in 2016 and in this opinion piece (attached), we discuss bonus options and what shareholders can do with these options.