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What is the message behind the growth in shareholder numbers in Listed Investment Companies (LICs)

Contango Asset Management

What is the message behind the growth in shareholder numbers in Listed Investment Companies (LICs)? Perhaps it is very simply that investors want income? CTN passed through the 5,500th shareholder milestone last Friday. Over the past 5 years growth had averaged 300-400 new shareholders a year. This year, it obtained 400 new shareholders in September through November alone. Something is happening and shareholder numbers in many other LICs have also grown. A cursory look at the data of Premiums and Discounts in LICs shows that many - particularly those that are Income focussed - are trading at significant Premiums to NTA. As in 15%, 25%, even 30% type Premiums (!). While there is sure to be a cyclical element to this, the phenomenal growth in SMSFs filling LIC registers, the increase in the number of shareholders and these stellar Premiums suggest a structural change may also have occurred. While high premiums should not always be expected, it will be interesting to see how these evolved over the next few years.[Read the latest Morningstar/ASX LIC series Premium/ Discount snapshot here (VIEW LINK)

Contango Asset Management
Contango Asset Management
Fund Manager

Contango uses a combination of top down and bottom up analysis to identify the most attractive investment opportunities in the Australian share market. Contango's Business Cycle approach enables us to shift between growth and value depending on...


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