Why LICs trade at a premium and a discount

Geoff Wilson

As the share prices of listed investment companies (LICs) have traded closer to their true underlying values or net tangible assets (NTA), a flood of money has poured into the sector. The Australian Securities Exchange (ASX) reports the total number of LICs has jumped from 51 to 87 over the past three years with their combined market capitalisation increasing more than 40 per cent to nearly $30 billion. For prospective investors, a discount provides the opportunity to get exposure to the LICs' underlying assets for less than their value. Distinct from an unlisted managed fund, LICs can trade at a premium or a discount to the value of their underlying assets. In this article Chris Stott, Chief Investment Officer at Wilson Asset Management, shares some tips on how to invest in LICs like a pro: (VIEW LINK)

Geoff Wilson

Geoff founded Wilson Asset Management in 1997, and has over 35 years direct experience in investment markets. Geoff also created Australia’s first listed philanthropic wealth creation vehicles, Future Generation.



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