For those of you who don't know, a Listed Investment Company or LIC, is a company that owns other companies as investments. LICs are similar to Exchange Traded Funds (ETFs) but instead of following an index passively, they have portfolio managers who actively buy and sell shares based on which investments they think will outperform the market over the long-term.
Here are two LICs that I personally own, and I am confident in the portfolio managers' ability to pick the winners.
MFF Capital Investments Ltd (ASX: MFF)
MFF stands for Magellan Flagship Fund and is affiliated with Magellan Financial Group Ltd (ASX: MFG), although in recent years, the two companies have become more segregated and are 'doing their own thing'.
MFF is run by one of the co-founders of Magellan, Chris Mackay – who is recognised as one of the top fund managers in Australia. MFF specialise in international companies as well as ASX stocks (although at the current time MFF's portfolio is mostly concentrated in US stocks). The current top stocks that MFF holds include the US payment giants Mastercard and Visa as well as Alphabet, who you might know as Google.
Over the past 5 years, MFF shares have generated a return of approximately 18.2% per annum (before dividends), which is an impressive performance. With this track record, I'll definitely be looking to add to my position in the future.
WAM Global Ltd (ASX: WGB)
WAM Global is part of the famous Wilson Asset Management stable, run by Geoff Wilson who is one of the most successful asset managers in Australia. WAM's flagship LIC – WAM Capital Limited (ASX: WAM) has returned 16.6% per annum after fees since its inception in 1999.
WAM Global seeks to apply Wilson's successful investment strategy to small- and mid-cap companies around the world (hence the name) – the first time that WAM has ventured outside our shores. Some of its top holdings include Alphabet, American Express and UK-based liquor-king Diageo.
Although WAM Global only launched in June last year, I am confident that expanding beyond the 2% of global stocks that is the ASX will be a successful strategy for a company that has achieved phenomenal success over the last 20 years. WGB is currently trading at a near-12% discount to NTA, which is (in my opinion) a great time to buy in for an instant return.
