Here’s why I own shares of MFF Capital Investments Ltd (ASX:MFF)

MFF Capital Investments Ltd (ASX: MFF) has been a good pick for my portfolio since I invested a while ago. It’s a listed investment company (LIC) that’s affiliated with Magellan Financial Group Ltd (ASX: MFG).

Here’s some of the reasons why I like it:

Management aligned

Indeed, MFF Capital is run by one of Magellan’s co-founders Chris Mackay. In-fact he’s one of the reasons why I like MFF Capital. Businesses get a tick if management are very aligned with shareholders.

Chris Mackay and his family own almost 61.9 million shares, which is worth around $164 million. There aren’t many management teams who own a bigger dollar amount of their company than Mr Mackay does.

Overseas diversification

Most Australian businesses and LICs are domestically-focused. There aren’t too many that have exposure to foreign earnings.

MFF Capital is all about investing in overseas shares. A lot of its top holdings generate earnings across the globe. Those top holdings include: Visa, MasterCard, Alphabet (Google) and Facebook. It also owns shares that are focused on the American domestic economy, which is diversification away from Australia.


MFF Capital has been one of the top-performing LICs across the whole industry, indeed for the five-year period to the end of April 2018 it provided the biggest total shareholder return (TSR) out of all of the LICs that Baillieu Holst provides research on.

Its total shareholder return during those five years was 18.2% per annum. The next highest performer was WAM Research Limited (ASX: WAX).

Foolish takeaway

MFF Capital could continue to be one of the top-performing LICs because it can choose whichever shares it thinks are good value all around the world. The American economy is likely to continue growing well for the next year or two due to President Trump’s stimulus.

It’s currently trading at around a 6% discount to its pre-tax NTA. It doesn’t have much of a dividend yield but it does plan to increase the dividend over time.

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Motley Fool contributor Tristan Harrison owns shares of Magellan Flagship Fund Ltd 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 Scott Phillips.

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