MENU

The Top 10 best performing Listed Investment Companies in the past decade

Listed Investment Companies (LICs) have a lot in common with managed funds, but also have their own unique advantages and disadvantages.

For investors looking to get immediate diversification, an LIC makes a lot of sense. Most investors will gravitate towards the top two largest LICs – Australian Foundation Investment Co.Ltd. (ASX: AFI) and Argo Investments Limited (ASX: ARG), but there is a case to look beyond those two.

For one, their 10-year performance is average, coming in at 5.7% for AFIC and 4.9% for Argo. 6 LICs have performed better than AFIC.

These are the top 10 performing LICs over the past 10 years on a pre-tax net tangible assets basis. In other words, these companies have grown their assets the most – although their share price growth may not reflect that.

Company Last Price Market Cap ($m) 10-Year return
Carlton Investments Limited (ASX: CIN) $31.49 $833.7 9.7
WAM Capital Limited (ASX: WAM) $2.26 $93.6 9.4
Australian Leaders Fund Limited (ASX: ALF) $1.52 $411.6 9.3
Mirrabooka Investments (ASX: MIR) $2.82 $286.0 8.2
WAM Research Limited (ASX: WAX) $1.52 $264.7 6.7
AMCIL Limited (ASX: AMH) $0.96 $247.7 6.6
Australian Foundation Investment Co.Ltd. (ASX: AFI) $5.64 $6,374.9 5.7
Milton Corporation Limited (ASX: MLT) $4.26 $2768.7 5.6
Flagship Investments Ltd (ASX: FSI) $1.60 $40.7 5.5
Bki Investment Co Ltd (ASX: BKI) $1.59 $948.5 5.4

Source: Bell Potter

It also pays to remember that the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) has returned 4.9% annualised, including dividends reinvested over the past 10 years. Which means that all companies above managed to beat the primary index – a fabulous result.

However, the SPDR S&P/ASX 200 Fund (ASX: STW) ETF has returned a compound annual return of 7.7% since inception in August 2001 – more than 15 years ago. That partly reflects the importance of investing for the long term.

Foolish takeaway 

Investing in LICs can be an easy way to gain instant diversification and exposure to different classes (like small and micro caps or international equities), but it’s also important to make sure that their performance is better than the index – otherwise investors may as well just put all their cash into a low-fee exchange traded fund (ETF).

How 1 Man Turned $10,600 Into Over $8 Million in the stock market

Discover how one man turned a modest $10,600 investment into an $8,016,867 fortune. Learn more about this man and how you can start down the path toward financial independence. Simply click here to learn more. No credit card required.

Motley Fool writer/analyst Mike King doesn't own shares in any companies mentioned. You can follow Mike on Twitter @TMFKinga

The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss a very important event! Chief Investment Advisor Scott Phillips and his team at Motley Fool Share Advisor are about to reveal their latest official stock recommendation. The premium “buy alert” will be unveiled to members and you can be among the first to act on the tip.

Don’t let this opportunity pass you by – this is your chance to get in early!

Simply enter your email now to find out how you can get instant access.

By clicking this button, you agree to our Terms of Service and Privacy Policy. We will use your email address only to keep you informed about updates to our website and about other products and services we think might interest you. You can unsubscribe from Take Stock at anytime. Please refer to our Financial Services Guide (FSG) for more information.