Why invest in LICs?
Operating much like managed funds or exchange-traded funds (ETFs), listed investment companies (LICs) allow you to gain exposure to a diverse range of assets with a single investment.
Although LICs offer similar exposure to asset classes available through many unlisted managed funds, they are generally more transparent as they must comply with the stock exchange’s corporate governance and reporting requirements.
Most LICs usually distribute their income by way of fully franked dividends to minimise tax and produce regular income.
LICs are ideal for investors wanting to achieve market diversification or who many not have the expertise or inclination to invest directly in other ASX-listed companies. Learn more
Usually the management costs associated with established LICs is quite competitive. The management expense ratio of LICs is generally significantly lower than similar unlisted managed funds.