Future Generation Global Investment Co Ltd (ASX: FGG) could be the best way on the ASX to get exposure to international shares.
It is a listed investment company (LIC) that invests into the funds of leading ASX managers that focus on overseas shares.
For example, 8% of the assets are invested in a Magellan Financial Group Ltd (ASX: MFG) fund, 8.3% is invested in an Antipodes fund, 7.7% is invested in a Cooper Investors fund and so on.
You’re getting excellent diversification with this because each fund will have a completely different portfolio, so you’ll be exposed to hundreds of internationally-listed shares.
But, I don’t think diversification is the best part about Future Generation. The managers don’t charge management fees or performance fees – instead, 1% of the net tangible assets (NTA) per share is donated to youth mental health charities each year.
This means that if the overall Future Generation portfolio outperforms the MSCI AC World Index (AUD) then shareholders get to keep the difference, which is certainly the case over the past year – it outperformed the index by 3.5% over the past 12 months.
Some of the charities supported by Future Generation Global include Beyondblue, Black Dog, Headspace and Reachout.com. A recent share purchase plan and placement raised almost $128 million, which will increase the LIC’s annual donation by more than $1 million.
The dividend paid by Future Generation is currently an annual fully franked payment of 1 cent per share. This amounts to a grossed-up dividend yield of 1.1%. International shares don’t pay as much of a dividend compared to Australian shares.
There are many reasons to like Future Generation from both an investment and philanthropic standpoint. Whilst I prefer the ASX-focused Future Generation Investment Company Ltd (ASX: FGX), it would be possible to just own shares of both Future Generations and tick all the investment boxes such as diversification, plus you’ll be indirectly donating to worthy causes.
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Motley Fool contributor Tristan Harrison owns shares of FUTURE GEN FPO. 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.