LIC & LIT Listed Investment Companies (LICs) 2021

Nothing is as good as having your pie and eating it.

Yep. Although I like money coming in, I do get irked at what I view as short-term thinking by some companies. While the impact on my will not be a worry, it's more about what happens to younger generations. I do sometimes wonder if a number of management don't think beyond the next shareholder (virtual) meeting.

 

At the risk of thread drift here, guess the same can be said of politics.

They will likely accept this is the new normal. In the words of Canadian folk singer, Bruce Cockburn, 'The trouble with normal is it always gets worse'. Written back in the 80's & still very relevant.
To get back to the Lic thread, how is this relevant? No idea, just thought I'd better mention Lic's.

 

Now that you've mentioned it.

Livestock Improvement Corporation. Seminal.

A growth story. No idea of the CAGR though.

 

Thanks for the help on the LICs over the last few weeks guys, after doing more research I still couldn't find anything worth splitting cash into so I ended up buying more VGS + A200 ETFs! I still hold AUI, ARG, and BKI from before but can't see anything else in the LICs I wanted at the current situation. I'll keep getting A200 instead I think.

 

High-Yield Dividend ETF Or Listed Investment Companies?



Dividends from his LIC's and ETF's compared







And LIC's for the Growth bump (Total Return) in old mate's video







Of course, I prefer the index style ETF's (& the Grandfather LIC's) rather than the high yield dividend style though

 

Just my:



but what can one say apart from:

 

By the way, has anyone ever wondered whether any of this "which is best" sort of thing actually matters?

I am reminded of the couple @pippen has mentioned on occasions. The gentleman holds a number of ARG shares while his wife invests elsewhere. Apparently neither care a lot about total return, specific numbers or other finer details. As long as it is working for them they're OK with their lives. And there are references in various posts to others who have a not dissimilar approach.

So in which group would you rather be? Something to ponder there I think.

 

Good choice IN MY OPINION.... LIC is just paying off fees to the manager with moderate return to holders ... if you look at famous AFI paying 34c (fully franked) since 2016 with exception of one special dividend in 2019 for 10c ..... ! so basically inflation doesn't exist ... !

 

Only over five years. Done any numbers for AFI v STW since January 2000?

 

Quick call to daughter.

Over 20 years:

AFI: 5.44% CG, 5.81% dividends
STW: 3.75% CG, 4.94% distributions.
MIR: 7.12% CG, 7.42% dividends (Oct 2001)

Short-term not an indicator of much at all is what I was taught. But my teacher could have been just as much an idiot as me.

 

I've posted this link elsewhere but may as well put it here too. Basically it's good news and it is consistent with the period following other pandemics which I touched on last year.

The data speak: Stronger pandemic response yields better economic recovery

While there is a high possibility of it occurring as we don't know what it will actually look like (things change) it could be beneficial not to adhere to only one product approach because I reckon you simply don't know.

 

Nup! I don't wonder because to me it doesn't matter. The mantra of just invest as much as you can as often as you can has worked well for us . Time and compounding is what makes the difference.

 

Over 20 years:

VTS: 14.16% CG, 3.46% dividends - Total Avg 15.05%
IVV: 9.31% CG, 2.48% dividends - Total Avg 10.18% (since 2007)
VAS: 5.22% CG, 5.39% dividends - Total Avg 8.64% (slightly better then AFI)

 

you have listed 2 international ETF's here - they are not a comparison to AFI, STW and MIR shown by @SatayKing. VAS is a comparison to AFI and STW but was not listed on the ASX 20 years ago. I do own VAS & AFI

 

It's an interesting comparison, I do think LICs have some tax advantages over the ETFs that can offset that management fee - and in most cases the fee is only slightly more than ETFs. Also past performance is not always a predictor of future performance, but all in all the performance is not that different - I just can't find anything compelling at todays date.

I have some thoughts too - the huge trend of youngsters to pile into ETFs may evolve into LICs eventually coming into discount territory as a whole, at that stage I'd like to pick more up. If this does happen it will be a few years though.

 

Shock and awe.

Obviously not a true investor. In order to be so you must concern yourself over tax drag, total return, asset allocation, short-term objectives, sector performance and various other nuances (nuisances?) It's not as if you have a life to live.

Being blasé just will not do.

 

VTS and IVV is listed on ASX so they are not international but certainly their underlying assets are international.

 

You can certainly have your own definition of true investor with glasses, cup of coffee/tea and hat but that's irrelevant in term of absolute return... IMO.

However, ETF is surely for young ones then those near retiring either due to age or luck (lotto winners or FIREbugs).... as it tends to be better return on long-term but certainly time to time one needs to re-balance and change for diversification if market changes... !

 

some of the very valid point in your post particularly LIC offers 100% franking credit that you don't get with ETF without franking credit... however most LIC are limited 20 to 50 ASX listed stocks while ETF with passive index tracking covers 100's of stock (VTS - 500+, IVV - 500, VAS - 300) which provides better risk coverage then LIC .. IMO. Also LIC's tax advantage is not big enough to cover fees cost as not everyone can use franking credit to their favour.

Also another going point you raised about buying LIC at discount. most LIC with exception to some few big one normally trades at a discount so exit when you wanted not necessary gives you your full return so buying LIC at discount is important.. I won't touch AFI until it goes below it's NAV if I want to invest in AFI.

 

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