Why has the AFIC share price leapt 5% in 4 weeks?

AFIC has had a corker of a month. Let’s dig into why…

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Key points

  • AFIC is one of the largest LICs on the ASX
  • It has gained 5% over just the past four weeks
  • The healthy gains have matched the performances of the company's top five shareholdings

Despite today’s slide, it has been a pretty good month for the S&P/ASX 200 Index (ASX: XJO) and ASX shares. It has also been a good month for the Australian Foundation Investment Co Ltd (ASX: AFI) share price as well. AFIC (for short) is one of the largest Listed Investment Companies (LICs) on the ASX. And over the past four weeks, this company has seen its share price rise from $7.90 to the $8.30 it closed on today. That’s a rise of 5%.

So what’s behind AFIC’s rather stellar run since early March?

What’s behind the AFIC share price’s recent gains?

Well, let’s check out this LIC’s underlying holdings and see if we can figure it out. So, as an LIC, AFIC holds a portfolio of underlying ASX shares for the benefit of its shareholders. Thus, it could be described as something closer to a managed fund than your typical ASX business.

As it currently stands, AFIC has only released its top 25 investments as of 28 February 2022. But given this company’s long-term focus, it’s not too likely that it has made any dramatic changes since. So as of that date, AFIC listed its top five ASX shareholdings (and their portfolio weightings) as follows:

  1. Commonwealth Bank of Australia (ASX: CBA) at 8.6%
  2. BHP Group Ltd (ASX: BHP) at 7.5%
  3. CSL Limited (ASX: CSL) at 7.2%
  4. Macquarie Group Ltd (ASX: MQG)
  5. Transurban Group (ASX: TCL)

So, since 9 March, CBA shares have risen almost 8.5%.

BHP shares are up 5.8% over the same period.

CSL has gained 4.17%.

Macquarie has put on a whopping 14.7%.

And Transurban shares have given investors a gain of just over 6.9%.

So it’s not too hard to see where the AFIC share price gains have come from over the past four weeks.

At the current AFIC share price, the Australian Foundation Investment Co has a market capitalisation of $10.2 billion, with a dividend yield of 2.88%.

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns and has recommended CSL Ltd. The Motley Fool Australia has recommended Macquarie Group Limited. 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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