In my opinion, owning shares of MFF Capital Investments Ltd (ASX: MFF) could be one of the best way to get international investing exposure.
MFF Capital is a listed investment company (LIC) which holds a minimum of 20 shares, predominately listed overseas.
The LIC’s investment team aim to identify quality companies in attractive industries by focusing on “outstanding” companies at prices below their intrinsic value whilst preserving capital and minimising risk of loss.
I believe most Australians should seek a higher level of exposure to the international share market because Australia only represents 2% of the world’s total market capitalisation, which offers limited ideas for market-beating opportunities and diversification.
Imagine trying to pick who will be the best students in a school and only allowing yourself to choose from one class. The rest of the school is very likely to have excellent candidates too, if not better ones than from the one class you’re limited to.
According to Baillieu LIC Research’s May 2019 update, MFF Capital has been the best-performing LIC over the past five years with an average return per annum of 20.3%. Of course a lot of that outperformance compared to ASX-focused LICs has been because of the strength of US shares, but that does say that MFF Capital has been invested in the right place.
Due to its global investment mandate, MFF Capital’s portfolio can shift to whatever it thinks is the best long-term opportunity.
I also like that MFF Capital shareholders are only paying a maximum of $5 million a year in management fees, so the cost as a percentage to MFF Capital is reducing every year.
I think MFF Capital is a high-performing global LIC option with low fees and exciting long-term potential. Other than its low dividend yield, I think it has plenty of positive attributes and it’s currently trading at a discount to its underlying assets. I’d be very happy to buy a parcel of shares today.
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Motley Fool contributor Tristan Harrison owns shares of Magellan Flagship Fund Ltd. 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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