LICs showing good value: Zenith
Listed investment companies (LICs) are producing high returns with the bonus of high franking despite its relatively poor reputation, a research house found.
Zenith Investment Partners 2014 LIC Sector Review found there are LICs out there with value that can benefit those looking for absolute returns; on the condition they do not buy shares at too high a premium.
"LICs have for many years often been viewed as poor cousins to managed funds by many advisers who often struggle with their propensity to trade away from underlying value," senior investment analyst Dugald Higgins said.
But Zenith found this issue is overstated, with Higgins adding LICs can increase franking and shield the effects of capital flows to the investment portfolio from the applications and redemption process found in managed funds.
The report looked at 44 LICs across Australia and global equities with a range of market capitalisation and strategies, including long-only and absolute return.
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