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Australian Foundation Investment Company (AFIC)

Fund Manager: Australian Foundation Investment Company
Inception Date: Jan 01, 1936

The chief executive of Australia's oldest listed investment company says Labor's plan to change dividend imputation rulesgoes to the heart of the fairness of the tax system, and will reverberate for generations. Speaking on the sidelines of the annual general meeting of the Australian Foundation Investment Company, Mark Freeman said investors in the 90-year-old company would be among the hardest hit from the proposed changes. "Have a look at the people here," Mr Freeman said of the audience of mainly elderly retirees. "Do these look like the people Labor should be targeting? I'd love to get Bill Shorten here." [More]

The Labor Party's proposed changes to the franking credit system could push investors offshore in search of higher returns, according to the boss of the ASX's largest investment company. Australian Foundation Investment Company chief Mark Freeman said that changes proposed by Labor had been worrying his shareholders because many of them relied on dividends to fund their retirement. If elected, Labor will scrap cash refunds of excess credits for people who pay little to no tax. The SMSF Association forecasts a loss of $5000 a year for an average fund worth $1.1 million, but Labor's position is the policy is fair because it targets the wealthy; the proposal affects everybody except those in receipt of a Centrelink pension. [More]

There's no small irony in the fact that the new chief executive of Australia's oldest and best-known listed invested company is hanging out for a market correction. But that's exactly the position that Mark Freeman of Australian Foundation Investment Company finds himself in. The group's latest profit numbers show that AFIC's portfolio, which is focused on blue chip ASX giants led by the big four banks and BHP and Rio, underperformed the S&P/ASX 200 accumulation index on a six-month, 12-month and five-year basis.   [More]

The nation’s largest listed investment company, Australian Foundation Investment Co, has warned that with many sectors of the sharemarket trading at or close to the top of their long-term valuation ranges, the upcoming reporting season will be important in providing support for the high share prices of many companies. It also lashed the Federal government’s recent tax on the big four banks and Macquarie Bank as an “opportunistic approach to policy” and no substitute for a full and proper approach to considered economic reform. AFIC (AFI) has more than $1.6 billion invested in Australia’s big banks. AFIC also remains concerned about rising levels of household debt in Australia and its impact on consumption. But on a positive note, AFIC, which has nearly $7bn invested in equities, said global growth may continue to deliver a better-than-expected outcome for commodity prices, which should help its portfolio of mining stocks, which includes its third biggest holding, BHP, and its 8th largest holding Rio Tinto. [More]

Room for growth left in LIC market: AFIC

Investor Daily - Jul 03, 2017

The rapid increase in listed investment company (LIC) listings on the ASX could continue, albeit with specialist companies targeting niche sectors of the market, according to the Australian Foundation Investment Company (AFIC). Speaking to InvestorDaily in the wake of a Zenith report that said the continued growth of the sector is likely unsustainable, AFIC general manager business development and investor relations Geoff Driver said there “probably will be a few more” LICs listing in the coming years. “It’s hard to know, but if fund managers see an opportunity to tap in to the market, then I think they’ll probably try to do it,” he said. [More]

Australian Foundation Investment Company holds $1.9 billion worth of shares in the big four banks and managing director Ross Barker says the practical outcome of what he describes as a "strange" message the federal government is sending to investors, is that bank dividends will be cut further. AFIC and fellow listed investment companies Argo Investments and Milton Corporation have a heavy exposure to banks and are wincing more than most after the federal budget, as uncertainty swirls about whether the banks will now make shareholders bear the brunt of its new $6.2 billion bank levy. "I think it's a pretty poor outcome," Mr Barker said on Wednesday about the federal government's bank levy. "What the government has done is introduce a tax that just targets five companies. Not an entire sector, just five companies. That's appalling," he said. [More]

This might sound like a fairy story, but once upon a time investors expected to receive double digit returns and often did. Fat yields and easy money were all the rage, so if various fees were chewing up 3 per cent or so, what the heck – there was plenty to go around. Of course, money was not growing on trees and inflation was eating up a bigger slice of earnings than most realised, but the structure of the wealth management industry and a mixture of innocence and laziness on the part of average investors meant high fees were the norm and therefore didn't seem so high to most people. In other words, we were mugs. [More]

Whilst ETFs are a reasonably new phenomenon, Listed Investment Companies (LICs) have a much longer history, with 30 LICs available on the ASX when the first ETF was launched in 2001. However, they go back much further than that. The oldest and largest LIC on the ASX (AFIC) began life way back in 1936. There’s 6 LICs listed on the ASX which began life over 40 years ago, making them older than many readers of ETF Watch. Today we take a look at the grandfathers of LICs and see how t ... [More]

AUSTRALIAN companies will be at a massive disadvantage if US president Donald Trump cuts America’s corporate tax rate, the head of Australia’s biggest listed investment company says. Australian Foundation Investment Company managing director Ross Barker said the corporate sector here would struggle to attract investment or justify spending on new projects if Mr Trump delivered on his pledge to cut the US corporate tax rate from 35 per cent to 15 per cent. [More]

As an alternative dividend source to the banks and property trusts, the burgeoning listed investment company sector should be on the shopping list of any self-respecting, self-funded retiree. An LIC is a basket of stocks chosen by a manager and then listed as an investment vehicle on the sharemarket. Critics of LICs contend that investors are merely incurring a management fee to invest in the usual blue-chip suspects: for example, despite recently broadening its investments into selected mid-caps, the banks still account for 25 per cent of the portfolio of the biggest LIC in the local market, the Australian Foundation Investment Company. [More]

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