Listed investment companies (LICs) trade on the ASX just like ordinary shares.
LICs typically invest in a diversified portfolio of assets, including shares, bonds, property, and other securities.
ASX LICs are run by professional managers who make judgment calls on what assets to invest in, and when to buy and sell them.
Their investment strategy may focus on a particular market sector, or type of stock, like ASX growth shares or value shares.
The market's largest LIC is Australian Foundation Investment Co Ltd (ASX: AFI).
AFIC's investment style is to buy shares and hold them for the medium to long term.
Argo Investments Ltd (ASX: ARG) is Australia's oldest LIC and invests in a diversified group of ASX shares.
Argo describes itself as a "value-style investor with a bottom-up approach to investment analysis".
On The Bull, James Bills from Shaw and Partners explains his buy rating on two other ASX LICs today.
Let's take a look.
Image source: Getty Images
L1 Long Short Fund Ltd (ASX: LSF)
The L1 Long Short Fund share price is $4.66 as of market close on Tuesday and is up 57% over 12 months.
Bills says:
LSF provides exposure to global long and short strategies managed by a well regarded investment team with a strong long term track record.
The fund's flexible approach enables it to capitalise on rising and falling markets, which is particularly effective in volatile macroeconomic conditions.
Management's meaningful co-investment aligns interests with investors, while the portfolio's global positioning offers diversification beyond Australian financial markets.
Recent performance has demonstrated resilience, with the fund continuing to offer an attractive blend of growth potential and income generation within a diversified portfolio.
Hearts and Minds Investments Ltd (ASX: HM1)
The Hearts and Minds Investments share price is $2.99 as of market close on Tuesday and is down 7% over 12 months.
Bills comments:
HM1 offers investors access to a concentrated portfolio of high conviction global equity ideas sourced from leading fund managers across the world.
The unique structure, combined with its philanthropic component, has attracted some of the industry's top investors, enhancing the quality of stock selection.
The portfolio is tilted towards innovative, growth oriented companies with long term upside potential. It also pays a fully franked dividend. HM1 was recently trading at a discount to net tangible assets.
In our view, the company provides an appealing entry point for investors seeking exposure to global growth themes with strong management backing.
