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AFI, AUSTRALIAN FOUNDATION INVESTMENT COMPANY
ShareCafe Admin
post Posted: Jul 27 2021, 09:59 AM
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New video article up.

AFIC 2021 Full Year Result Briefing

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nipper
post Posted: Jul 26 2021, 08:48 PM
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In Reply To: nipper's post @ Jul 25 2021, 01:52 PM

QUOTE
AFI reports on Monday ..... And I wonder how their International LIC is coming along?


AFIC has also hinted it will launch an international equities LIC after building a $48 million holding of global stocks.

A lot of the international products I am seeing are 1 per cent plus performance fees. If we can make a profit at 1 per cent or less with no performance fees, I think that is a product many investors would like, Mr Freeman said. It is still very early days.


From the FY21 Report:
QUOTE
As first signalled at the AGM in October 2020, a small part of our funds, $48 million (which represents approximately 0.5% of the portfolio) was invested into a diversified global equities portfolio during the latter half of the financial year. This consists of what we have assessed to be high quality companies with a strong competitive advantage, good growth potential and across a broad range of industries. This activity is potentially a precursor to establishing a separate low cost international Listed Investment Company in the future...




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"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne
 
ShareCafe Admin
post Posted: Jul 26 2021, 11:05 AM
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New article up.

Does Size Matter for Listed Investment Companies?

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nipper
post Posted: Jul 26 2021, 10:56 AM
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In Reply To: nipper's post @ Jul 26 2021, 10:53 AM

I always like to have a look at what is newly included in and sold from the portfolio.


\Portfolio Adjustments A number of purchases were undertaken during the financial year. The largest was participation in the IPO of PEXA Group. While the pricing reflected the strong market conditions towards the end of the period, the company appears well positioned as a good long term investment. Other new holdings added to the portfolio were Endeavour Group, due to its demerger from Woolworths, FINEOS Corporation (including participation in its placement), Domino's Pizza Enterprises, Temple & Webster, Nanosonics and IDP Education. Periods of volatility throughout the year also provided opportunities to add to holdings with strong market positions such as Woolworths and ASX.
Major sales included the complete disposal of holdings in South32, Alumina and Brickworks, and these funds were deployed elsewhere in the portfolio. There was also some trimming of the positions in Qube Holdings, Brambles and Oil Search.
International Portfolio
As first signalled at the AGM in October 2020, a small part of our funds, $48 million (which represents approximately 0.5% of the portfolio) was invested into a diversified global equities portfolio during the latter half of the financial year. This consists of what we have assessed to be high-quality companies with a strong competitive advantage, good growth potential and across a broad range of industries. This activity is potentially a precursor to establishing a separate low cost international Listed Investment Company in the future.





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"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne
 
nipper
post Posted: Jul 26 2021, 10:53 AM
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FY numbers out and as expected, for the year that was very different

AFIC invests in a diversified portfolio of Australian equities, seeking to provide attractive income and capital growth over the medium to long term to shareholders at a low cost and low volatility. AFIC management expense ratio is 0.14% with no performance fees.

 The Full Year Profit was $235.1 million, down from $240.4 million in the previous corresponding period. The profit to 30 June 2021 includes a demerger dividend of $36.5 million (which was noncash and carries no franking) resulting from the Endeavour Group demerger from Woolworths. Excluding this one off item, the profit figure to 30 June 2021 was $198.6 million. This fall in profit versus the corresponding period last year was a result of the decline in underlying income as the economic impact of the COVID19 pandemic continued to limit dividends for many holdings in the portfolio.

 AFIC, as a long standing listed investment company, has reserves that can be used in difficult times. Drawing upon these reserves, the final dividend was maintained at 14 cents per share fully franked despite the fall in income over the year. Total fully franked dividends applicable for the year are 24 cents per share, the same as last year. Despite the significant disruption to income arising from COVID 19 over the last two years, AFIC has maintained its dividends to shareholders through this period.

 Activity in the portfolio was focused on consolidating the position around what we have assessed to be high quality companies with strong industry positions. This comprised exiting some holdings to fund purchases in existing and selected new holdings, including participation in the PEXA Group IPO.

Portfolio return for the year was 31.9%, including franking. This return was ahead of the S&P/ASX 200 Accumulation Index, which was up 29.1%, including franking. Over 10 years, the corresponding figures are 11.0% for AFIC and 10.8% for the Index. The AFIC performance returns are after costs.



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"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne
 
nipper
post Posted: Jul 25 2021, 01:52 PM
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In Reply To: nipper's post @ Jun 24 2021, 06:45 PM

and another viewpoint from AFI

https://www.afi.com.au/news/does-size-matte...tment-companies

Does size matter for Listed Investment Companies?​
.... investors may be wondering if size matters with LICs. Well, it does and it doesn't.....
  • ... Many of the LICs that have come to market over the last 10 years are small or do not appear to have focused enough on shareholder engagement;
  • ... there appears to be a strong link between size and discount;
  • ... larger LICs generally follow diversified strategies, and typically provide greater liquidity;
  • ... dedicate significant resources to shareholder engagement and marketing activity that is sometimes not possible in a smaller fund;
  • ... larger funds, which have economies of scale, can offer good value;
  • ... But ... this is all prefaced by performance. Performance is the key determinant. If a fund does not perform, it does not matter what size it is.

AFI reports on Monday 27th. And I wonder how their International LIC is coming along?



--------------------
"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne
 


nipper
post Posted: Jun 24 2021, 06:45 PM
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In Reply To: nipper's post @ Jun 4 2021, 09:46 AM

ShareCafe on the publicity path and have recently added this for AFI :


https://www.sharecafe.com.au/2021/06/23/suc...-the-long-term/

- one of my bigger Buy and Hold positions. And what is written here makes sense to me. First bought AFI in 1992 (for $1.65).... Still got them (and a few more)

QUOTE
AFICís low costs, low volatility and tax effective nature continue to stand out compared to other funds. A recent survey by Mercer ranking the volatility of returns from a universe of funds for the year to March 2021 placed AFIC at the top of the top quartile, which means we were just about the lowest volatility return fund relative to the return that was produced. We have also sustained our fully franked dividend throughout this most recent COVID period and the cost to investors of our product is extremely low at about 0.13 per cent, with no performance fees.





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"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne
 
nipper
post Posted: Jun 4 2021, 09:46 AM
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From the May NTA statement, out yesterday:
QUOTE
As first signalled at the AGM in October 2020, a small part of our funds, $45 million (which represents approximately 0.52 per cent of the portfolio) has been invested into a diversified global equities portfolio during May. This consists of what we have assessed as high quality companies with strong competitive advantage, good growth potential and across a broad range of industries.

AFI had mentioned in last October their intention to look at setting up an International LIC. This may be the first step, both to assess and perhaps to hold and move into said vehicle as seed holdings?




--------------------
"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne
 
nipper
post Posted: Jan 11 2021, 02:41 PM
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Bluechips rotating the lead of AFI holdings. Top 5:

End Dec 2020
1. CBA ... $648.7million .... 8.1% of portfolio
2. CSL ... $615.7million .... 7.7%
3. BHP ... $590.6million .... 7.4%
4. WES ... $371.5million .... 4.7%
5. TCL .... $322.9million ... 4.1%

End June 2020
1. CSL ... $608.5m ...... 8.5%
2. CBA ... $548.4m ...... 7.7%
3. BHP ... $498.8m ..... 7.0%
4. WES ... $330.5m ..... 4.6%
5. TCL .... $326.9m ..... 4.6%

End Dec 2019
1. CBA ....$631.2m .... 8.0%
2. CSL .... $584.7m .... 7.5%
3. BHP .... $524.7m .... 6.7%
4. WBC ... $387.3m .... 4.9%
5. TCL .... $341.2m .... 4.3%


End June 2019
1. CBA ... $654.0m .... 8.6%
2. BHP ... $554.8m .... 7.3%
3. WBC ... $440.9m .... 5.8%
4. CSL .... $440.3m ..... 5.8%
5. NAB ... $341.0m .... 4.5%

End Dec 2018
1. CBA .... $571.9m .... 8.6%
2. BHP .... $462.6m .... 7.0%
3. WBC ... $389.2m .... 5.9%
4. CSL .... $355.5m .... 5.4%
5. TCL .... $270.6m .... 4.1%



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"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne
 
nipper
post Posted: Dec 12 2020, 08:30 AM
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https://www.sharecafe.com.au/2020/12/10/a-v...-afic-saw-2020/

A very challenging year: How AFIC saw 2020

by Mark Freeman, Managing Director
The speed of change, not the recovery, in investment markets in 2020 was arguably both the biggest surprise and biggest opportunity for investors. At AFIC we successfully capitalised on several buying opportunities throughout the downturn, including participating in some key capital raisings to further solidify our position in what we consider as high quality companies.

Interestingly, we entered calendar 2020 with the mindset that we may see a correction in the markets from the highs in January by the end of the year, but the sharp fall in March through April following the outbreak of COVID19 and the pace at which the market has rallied has been staggering.

In a matter of only months, we witnessed the heavy impact of COVID19 on markets while a vaccine was potentially still years away. Since then, multiple potential vaccines have been developed and markets generally have rallied as interest rates continued to fall to record-breaking lows, leaving yield seeking investors with little choice but to put their money into equities......



--------------------
"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne
 
 


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