With all the trade tensions going around, global markets as well as the S&P/ASX 200 (INDEXASX: XJO) index have had a very shaky start to the week, although things seem to be looking up this morning.
It appears that volatility has made a comeback, which is an important reminder that we must be constantly vigilant and be aware of the riskier assets in our portfolios. It is also a reminder that when markets go down, there can be excellent opportunities exposed that were previously unavailable (at a good price, anyway).
Here are two listed investment companies (LICs) that I own personally and am looking to add to, as they are looking more attractive than they were a week ago on current prices.
MFF Capital Investments Ltd (ASX: MFF)
The Magellan Flagship Fund (MFF) is run by one of the co-founders of Magellan Financial Group Ltd (ASX: MFG), Chris Mackay, whose record shows he is an extremely capable manager. In fact, MFF has returned over 18% per annum over the past 5 years. MFF specialise in international companies, but can also own ASX stocks (although at this point there are no ASX holdings).
The current top three stocks that MFF holds are US payment kingpins Mastercard and Visa, as well as Home Depot. As of 31 May, MFF's net tangible assets (NTA) per share stands at $3.05 pre-tax, which is looking attractive considering its price is hovering around the $2.90 mark.
One of the best things about LIC investing is you can often lock in an instant return by buying $2 worth of stock for $1 (or in this case, $3.05 for $2.90).
Wam Global Ltd (ASX: WGB)
One of Wilson Asset Management's (WAM) newest LICs, WAM Global seeks to apply the WAM 'value-buy before a catalyst' investing strategy to small- and mid-cap global stocks.
Interestingly, WAM Global's top two holdings—Alphabet Inc. (aka Google) and American Express—don't seem like mid-cap stocks to me. However, considering WAM's performance history across its range of LICs and the plethora of opportunities that global markets provide, I am very confident in the long-term prospects for WAM Global.
I am buoyed by the fact that WAM Chairman Geoff Wilson has been heavily adding to his stash of WAM Global shares lately as well (12 buys since March), which show the management has confidence in the LIC going forward.
WAM Global shares also seem to be trading at a heavy discount to NTA, which came in at $2.28 at the end of April. Since WAM Global shares have been under that level for some time (and are currently under the $2 mark), we can see why Mr Wilson has been so active. Many of WAM's LICs habitually trade at big premiums
Foolish takeaway
We can see here that discounts are all around us, if you only know where to look. Both of these LICs are trading at NTA discounts and, given the history of the two fund managers, both look like pretty good deals to me.
