The listed investment company (LIC) Argo Investments Limited (ASX: ARG) is one of the biggest investment funds in Australia. But what ASX shares does it own?
Argo has a market capitalisation of around $7 billion according to the ASX. It has been operating since 1946.
It aims to provide a portfolio of diversified ASX shares, with low operating costs because of its internal management structure. Its management expense ratio is 0.14%.
The LIC looks to "maximise long-term shareholder returns through reliable fully franked dividend income and capital growth."
So, how does that translate into investments?
Argo's portfolio holdings
Argo's portfolio is focused on ASX blue-chip shares. Every month, the LIC tells investors what its portfolio looks like and what its biggest holdings are. From the latest monthly update, the LIC revealed these were the main positions:
Macquarie Group Ltd (ASX: MQG) – This is a global investment bank that offers various services like asset management, banking, investment banking and so on. It was 6.6% of the portfolio.
BHP Group Ltd (ASX: BHP) – BHP is a resources business that produces commodities like iron ore, copper and nickel. It was 5.8% of the portfolio.
CSL Limited (ASX: CSL) – CSL is a major ASX healthcare share that makes therapies and vaccines for people globally. It was 5% of the portfolio.
Commonwealth Bank of Australia (ASX: CBA) – CBA is Australia's biggest bank.
Rio Tinto Limited (ASX: RIO) – This business is a major commodity player, which is exposed to iron ore, copper, aluminium and others.
Wesfarmers Ltd (ASX: WES) – It has various operations including major brand names like Bunnings, Kmart, Officeworks and Priceline. Wesfarmers was 3.3% of the portfolio.
Telstra Corporation Ltd (ASX: TLS) – Telstra is Australia's biggest telco. It was 2.9% of the portfolio.
Australia and New Zealand Banking Group Ltd (ASX: ANZ) – ANZ is another of Australia's big four ASX banks. It was 2.8% of the portfolio.
Other positions in the top 20 holdings included: Westpac Banking Corp (ASX: WBC), National Australia Bank Ltd (ASX: NAB), Santos Ltd (ASX: STO), Ramsay Health Care Limited (ASX: RHC), Aristocrat Leisure Limited (ASX: ALL), Computershare Limited (ASX: CPU), APA Group (ASX: APA), Transurban Group (ASX: TCL), Woolworths Group Ltd (ASX: WOW), Sonic Healthcare Limited (ASX: SHL), QBE Insurance Group Ltd (ASX: QBE) and Australian United Investment Company Ltd (ASX: AUI).
Sector diversification
Argo Investments' industry allocation is fairly spread between various segments.
The LIC also lists out every month how much of the portfolio is invested in each sector. At 30 June 2022, this was the breakdown:
- Materials 15.1%
- Other financials 12.2%
- Banks 12.1%
- Healthcare 11.2%
- Consumer staples 9.1%
- Telcos and IT 8.6%
- Industrials 7.4%
- Energy 7.3%
- Consumer discretionary 6.4%
- Property 3.3%
- LICs 2.7%
- Cash 2.5%
- Utilities 2.1%
Foolish takeaway
As one of the biggest LICs, Argo shares get a lot of investor intention, particularly for its dividend. The last 12 months of dividends amount to a grossed-up dividend yield of 4.6%. The types of ASX shares it's invested in largely have a reputation for paying dividends to shareholders.
