LIC market slightly up in April
The total market capitalisation of the listed investment companies (LIC) market has increased to $28.8 billion in April from $27.8 billion a year ago, fuelled by diversity in the market, according to Zenith Investment Partners.
The Zenith's LIC Sector Review indicated that such a pace of growth capped two years of very strong market rise, which saw market capitalisation being driven up by 38.5 per cent since April, 2013.
Also, diversity in the market continued to expand, with an increase of LICs offering international exposure, however the market was still dominated with Australian LICs, as by market capitalisation.
Senior investment analyst at Zenith, Dugald Higgins, stressed that the sector continued to evolve bringing an increasing number of strategies on offer which "diversified away from the sector's historical Australian equities/long-only focus".
"LICs provide several potential benefits in relation to robust dividends and franking levels as well as efficiencies from managing a closed pool of assets."
"However, investors should be wary of not over-paying for the privilege, with many LICs continuing to trade at strong premium across the sector," he warned.
AUTHOR
Oksana Patron
Recommended for you
Infrastructure assets are well-positioned to hedge against global uncertainty and can enhance the diversification of traditional portfolios with their evergreen characteristics, an investment chief believes.
Volatility in US markets means currency is becoming a critical decision factor in Australian investors’ ETF selection this year.
Clime Investment Management is overhauling the selection process for its APLs, with managing director Michael Baragwanath describing the threat of a product failure affecting clients as “pure nightmare fuel”.
Global X will expand its ETF range of exchange-traded funds next month with a low-cost Australian equity product as it chases ambitions of becoming a top issuer of ETFs in Australia.
