Over the past month, the S&P/ASX 200 Index (ASX: XJO) has managed a decent performance. Since Monday 20 September, the ASX 200 has eked out a gain of 2%, rising from 7,248 points to the 7,393 points it’s currently sitting on at the time of writing today. But let’s have a look at the Australian Foundation Investment Co. Ltd (ASX: AFI) share price, and see how it stacks up.
The Australian Foundation Investment Company, or AFIC as it’s more easily known, is a Listed Investment Company (LIC), and one of the oldest of its kind on the ASX. It first opened its doors way back in 1928. Since then, it has made a name for itself as a slow-but-steady kind of investment that you can comfortably leave in the bottom drawer. That’s because it focuses on maintaining a broad, diversified portfolio of blue chip ASX shares, as well as some more recently acquired international exposure.
Its top holdings typically don’t differ too much from the ASX 200 itself. To illustrate, it’s current top 5 holdings are Commonwealth Bank of Australia (ASX: CBA), CSL Limited (ASX: CSL), BHP Group Ltd (ASX: BHP), Wesfarmers Ltd (ASX: WES) and Westpac Banking Corp (ASX: WBC). That’s almost the same as the current ASX 200 lineup.
So how has the AFIC share price stacked up over the past month?
AFIC vs. ASX 200: Who wins?
Well, it’s quite a contrast. Since 20 September, AFI shares have gone backwards from $8.39 to the present (at the time of writing) price of $8.13. That’s a decline of 3.34%. It also represents a gap of more than 5% between the ASX 200’s and AFIC’s respective performances.
So what’s going on here?
Well, the answer might be deceptively simple. At the end of August, AFIC reported that its net tangible assets per share (which equates to the value of its investment portfolio) was $7.71.
Fast forward a month, and AFIC has told us that its September NTA figure came in at $7.54. That’s a drop of roughly 2.2%. So the actual value of AFIC’s share portfolio fell by 2.2% over the month of September, perhaps reflecting the differences between the ASX 200 and said portfolio. That probably goes a long way in explaining AFIC’s share price drop over the past month.
With today’s share price, we also see that AFIC shares still trade at a premium of around 7.8% to their underlying NTA backing. At the current AFIC share price, this LIC has a market capitalisation of $9.94 billion and a dividend yield of 2.96%.