The Australian share market is full of listed investment companies. Some are good, some are old, some are new and some are rubbish.
Not every LIC is worth an investment but I think these three are:
WAM Microcap Limited (ASX: WMI)
WAM Microcap is the newest LIC to be launched by Wilson Asset Management.
It’s run by the same high-performing team but it focuses on the really small end of the share market.
The portfolio has already generated a 7.5% return since it listed at the end of June. I wouldn’t be surprised to see WAM Microcap outperform the market significantly over the coming years.
WAM Microcap doesn’t yet pay a dividend but I’m sure it will soon.
Clime Capital Limited (ASX: CAM)
Clime is a small LIC run by John Abernethy and his team.
I like Clime because it has a diverse investment approach of investing in ASX small caps, medium caps and large caps, as well as a few overseas shares too. The portfolio hasn’t generated large returns yet but in time I think the new approach will make it a market-beater.
It currently has a grossed-up dividend yield of 8.05%, which is paid quarterly.
WAM Leaders Ltd (ASX: WLE)
WAM Leaders is another LIC run by Wilson Asset Management.
Its focus is on the shares in the ASX200, which hopefully means the returns are more consistent and its investments pay a larger dividend on average.
I’m not sure how the returns of WAM Leaders will compare to WAM Research Limited (ASX: WAX) and WAM Capital Limited (ASX: WAM), but I think all three will produce market-beating returns and WAM Leaders would be a good way to get exposure to some of the larger businesses on the ASX.
WAM Leaders is trading with a grossed-up dividend yield of 3.86%, but I expect this yield will soon be in line with the other WAM LICs.
I’m excited to add shares of all three LICs to my portfolio, but I want to add WAM Microcap shares the most because I think it’s the one that will deliver the biggest returns.
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Motley Fool contributor Tristan Harrison owns shares of WAM Capital Limited, WAM MICRO FPO, and WAM Research Limited. 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.