The idea of philanthropy and investing don’t really mix. But, there are two ASX shares that you could achieve good investing returns and also be contributing to a good cause.
Investing is about making money, it’s what capitalism is all about. Philanthropy isn’t about making money – it’s about donating to a cause.
The concept of the Future Generation model is that they operate as companies and invest in leading Australian funds. The fund managers work for free so that the Future Generation companies can donate 1% of their net tangible assets (NTA) each year to youth related charities.
Future Generation Global donates to youth mental health charities and is invested in fund managers that invest in international shares.
The locally-focused Future Generation donates to youth charities and invests in funds that invest in ASX shares.
The great thing about both of them is that if their portfolios outperform their benchmarks there are no performance fees. The gross returns of both portfolios have indeed outperformed over the past year.
A particularly attractive thing about the ASX-focused Future Generation is that it aims to pay investors a (slowly) growing fully franked dividend. The trailing grossed-up dividend yield on offer is 5.6%.
The globally-focused Future Generation doesn’t receive much income and therefore pays a lower dividend yield. It currently has a trailing grossed-up dividend yield of 1.1%.
If there were two shares I’d really like to see succeed it would be these two Future Generation LICs. Management believe the annual donations could reach $10 million within a few years, which will be great when that milestone is achieved.
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.