How is AFIC (ASX:AFI)’s international share portfolio going?

How might AFIC’s international shares be travelling?

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Key points

  • AFIC is one of the largest LICs on the ASX
  • It has a reputation for investing in blue chip ASX 200 shares
  • But last year, AFIC initiated an international share portfolio

The Australian Foundation Investment Co Ltd (ASX: AFI), or AFIC for short, has to be one of the shares on the ASX boards with the most established reputation. That’s what can happen when a company is in the public eye for close to 100 years.

Yes, since 1928, AFIC has been one of the largest Listed Investment Companies (LICs) on the market. Through investing in a portfolio of blue chip ASX shares, AFIC has built up a loyal client base, perhaps assisted by its focus on slow and steady returns and a rising stream of fully franked dividends.

For decades, AFIC has focused on the ASX in sourcing its holdings. That continues today. The company’s latest update (as of 31 December) shows that its largest five companies were:

  1. Commonwealth Bank of Australia (ASX: CBA)
  2. CSL Limited (ASX: CSL)
  3. BHP Group Ltd (ASX: BHP)
  4. Macquarie Group Ltd (ASX: MQG)
  5. Wesfarmers Ltd (ASX: WES)

But that’s only the start of AFIC’s investments. Its top 25 shares equate to 77.4% of its portfolio. Yet, in its annual report last year, AFIC stated that its total portfolio contained more than 60 ASX shares.

However, last year, AFIC made a rather significant revelation in regards to its future plans. The company revealed that after decades of focusing on the ASX, it had expanded its holdings by initiating a portfolio of international shares. Here’s what the company said at the time:

A small part of our funds, $48 million (which represents approximately 0.5 per cent of the portfolio) was invested into a diversified global equities portfolio during the latter half of the financial year. 

What about AFIC’s international share portfolio?

Many of these shares were US tech giants, including these holdings:

But there was also some companies from Europe and China too. These included Estee Lauder, Unilever, LVMH, L’Oreal, Nestle and Alibaba.

So now that many moons have passed since the revelation of this portfolio’s existence, how might it have been faring for AFIC? Well, unfortunately, we don’t know for sure. Unlike its ASX holdings, AFIC doesn’t give us regular updates for the international shares portfolio. But we can always speculate.

So, since June last year, several of the shares listed above have given investors some pleasing gains. For instance, Apple has risen by 38.9%, Microsoft by 24.2%, and Alphabet by 18.4%. But not all have been so lucky. PayPal shares have lost 31.4% over the same period, while Alibaba has shed 38.3%.

Even so, it appears the majority of AFIC’s international shares have done well since early June, which probably bodes well for the company going forward. We might have to wait a while before we get another international portfolio update from AFIC. But it’s certainly been an interesting space to watch.

At AFIC’s current share price, this ASX LIC has a market capitalisation of $10.75 billion, with a trailing dividend yield of 2.74%.

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Motley Fool contributor Sebastian Bowen owns Alphabet (A shares), Mastercard, McDonald's, Meta Platforms, Inc., and Starbucks. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns and has recommended Alphabet (A shares), CSL Ltd., Meta Platforms, Inc., and Microsoft. The Motley Fool Australia owns and has recommended Wesfarmers Limited. The Motley Fool Australia has recommended Alphabet (A shares), Alphabet (C shares), Amazon, Apple, Macquarie Group Limited, Mastercard, Meta Platforms, Inc., Netflix, PayPal Holdings, and Starbucks. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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