It's hard to point to industries that are going to be successful over the next few years. As a whole, I think the listed investment company (LIC) space is a good one to be invested in.
LICs have a long-term focus, usually have effective management and provide investors with pleasing dividends.
Here are three of my favourites at the current prices:
Clime Capital Limited (ASX: CAM)
Clime Capital is run by John Abernethy and his investment team.
Clime has a quite a unique approach in that it's happy to own large-cap ASX stocks, medium-cap ASX stocks, small-cap ASX stocks and overseas-listed stocks.
It isn't trying to match any index, some of its top holdings are Crown Resorts Ltd (ASX: CWN), Ramsay Health Care Limited (ASX: RHC), Collins Foods Limited (ASX: CKF) and Gateway Lifestyle Group (ASX: GTY). I think this is the best approach to take as it gives the investment team the widest scope of possibilities.
Clime has increased its dividend every year for the past five years and is currently trading with a grossed-up dividend yield of 8.07%.
WAM Research Limited (ASX: WAX)
WAM Research is one of the LICs run by Geoff Wilson and his high-performing investment team.
The Wilson LICs focus on high-growth small-caps and mid-caps that have the potential to beat the market. If there aren't any good opportunities then the investment team are happy to hold cash.
WAM Research has returned an average of 21.1% per annum over the last five years and 19.2% per annum over the last three years. Past performance is not an indicator of future performance but I believe WAM Research's investment process will keep producing market-beating results.
WAM Research pays out a lot of the profit it makes as a dividend. It's currently trading with a grossed-up dividend yield of 8.99%.
Whitefield is a LIC that focuses on the large caps of the Australian share market.
It has been operating since the 1920s and has steadily been growing its dividend payments in all this time. Over the last five years it has returned an average of 15% per annum. I don't expect the next five years to be as good, but it could remain one of the best performing LICs that focus on the big end of town.
Whitefield is currently trading with a grossed-up dividend yield of 5.42%.
Foolish takeaway
I think all three LICs are worthy of being in a dividend-focused portfolio. I think WAM Research is the clear winner and the current price is very attractive. However, I am looking to add the other two to my portfolio in the future.
