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Listed Investment Companies (LIC's)

Discussion in 'Listed Investment Companies (LIC) and Trusts (LIT)' started by JIT, 20th Jul, 2007.

  1. JIT

    JIT Well-Known Member

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    Melbourne
    Hi everyone,

    Is anyone here investing in LIC's?

    And what is the difference between an LIC and an ETF (exchange traded fund)?

    Thanks,

    GSJ
     
  2. austing

    austing Well-Known Member

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  3. Bantam Roosta

    Bantam Roosta Well-Known Member

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    I invest in LIC's. I currently hold ARG, MLT & AFI (I don't recommend purchasing them at their current prices).

    LIC's are closed-end, whereas ETF's are open-ended. Basically with ETF's, they are more like managed funds, as investor sentiment is taken out of the equation, whereas LIC's are left wide open to market forces. Apart from that, I think they are very similar. I don't have any ETF's so am not very familiar with the details of these.

    BR
     
  4. JIT

    JIT Well-Known Member

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    Thanks for the replies.

    Will check out those links.

    Surprisingly small amount of ETF's available in Australia, and much, much more in the US. Hasn't caught on here, not yet anyway?

    Personally I prefer ETF's over LIC's.

    GSJ
     
  5. Simon Hampel

    Simon Hampel Co-founder Staff Member

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    I imagine there's no trailing commission to be had from ETFs, so advisors wouldn't be putting their clients money there, nor would much super money go into them either I'd guess ?

    Don't forget that our superannuation policies in Australia have driven a lot of the growth in managed funds locally.
     
  6. FrankGrimes

    FrankGrimes Well-Known Member

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    I have some ARG and would like to get some more at some stage. Any particular reason for this? Or you just feel they are expensive? But they are still less than their current NTA.
     
  7. Bantam Roosta

    Bantam Roosta Well-Known Member

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    I don't think they are expensive. I would say ARG is fair value, but I like to buy when they are cheap. Long term, which most LIC investors are, you would probably be ok, but that's not to say the market won't tank at some stage. 2 months ago ARG was ~$7.60 with an NTA of $8.07 *. It certainly doesn't mean it will happen again in the near future, but I have enough at this stage to keep me happy.

    BR

    * They were also ~$8.15 when the NTA was ~$7.70 earlier in the year.
     
  8. Glebe

    Glebe Well-Known Member

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    Nice, that's a 5.8% discount. I wish my wife was more keen on those specials than the ones behind windows! :p
     
  9. Brengun

    Brengun Active Member

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    Lowood, Qld
    LOL. I was a good wifey today. I could have bought a new kitchen dining suite as the old one is literally falling to bits, but I resisted and bought some PPT shares today. I have the selling agents card with the discount quote for the dining suite and it's good till the end of Sept. :D
     
  10. dkmc

    dkmc Well-Known Member

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    I love LIC's. ARG and AFI are great
    When you have a small portfolio its good when they offer you to buy $5000 worth of shares at 2.5% discount and no brokerage
    I think they do this around sept, -- jan each year
     
  11. Simon

    Simon Well-Known Member

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    What would be the number one choice in LIC for someone looking for solid reliable growth?
     
  12. BuffettTheDog

    BuffettTheDog Active Member

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    Melbourne, VIC
    Are you talking about the dividend reinvestment plan? Or is this something else?