Two of those that have been performing well are from Geoff Wilson's Wilson Asset Management stable, with the $2.1 billion WAM Capital Ltd (ASX: WAM) a good starting place.

This managed fund has been around since 1999, and in recent years, one of the great things about it is its steady dividend payments.

Consistent returns

The fund has paid dividends every year since its formation and, in the past few years, has kept its final and interim dividends steady at 7.75 cents, franked to 60%.

Calculated at the current share price of $1.83, that's a trailing dividend yield of 8.47%.

The fund recently put out an investment update, which indicated its investment portfolio performance since inception back in 1999 was 15.3%, compared with the All Ordinaries Index's of 8.6% over the same period.

Some of WAM Capital's top holdings include Life360 Inc (ASX: 360), A2 Milk Company Ltd (ASX: A2M), and Flight Centre Travel Group Ltd (ASX: FLT).

Recent dividend boost

Also from the Geoff Wilson stable is WAM Active Ltd (ASX: WAA), a much smaller fund with a value of $82.6 million.

WAM Active has also been a steady dividend payer and recently announced an increased interim dividend of 3.2 cents per share as well as a special dividend of 1 cent per share.

This brought the annualised interim dividend yield up to 6.5%, or 9.3% grossed up.

Mr Wilson said at the time that the six-month investment portfolio performance for the fund had been the best since its inception 18 years ago, allowing the fund to pay the increased dividends, which are still available for investors, given the ex-dividend dates for each are in May and June.

Deputy portfolio manager Shaun Weick said the fund had been positioning itself in precious and base metals "as we believe these companies are well-positioned for near-term outperformance as the US continues to reduce interest rates, global growth improves and the US dollar moves lower''.

Some of WAM Active's top 20 holdings include Capstone Copper Corp (ASX: CSC), Zip Co Ltd (ASX: ZIP), and Alcoa Corporation (ASX: AAI).

The third fund, which is looking attractive from a trailing dividend yield perspective, is the Ophir High Conviction Fund (ASX: OPH), which is sitting on trailing returns worth 8.3%, unfranked.

Ophir's dividends have been less predictable than those of the previous two funds, but its portfolio performance since inception in 2012 has been robust, at 14%, easily surpassing its benchmark target.

Some of Ophir's top holdings include Megaport Ltd (ASX: MP1), ResMed Inc (ASX: RMD), and Infratil Ltd (ASX: IFT).

The post Looking for strong dividend yields? These three managed funds might fit the bill appeared first on The Motley Fool Australia.

Argo Investments Limited (ASX: ARG)

The venerable Argo Investments is one of Australia's oldest and largest listed investment companies. Established in 1946, it has delivered consistent returns to shareholders. The firm now invests about $8 billion on behalf of more than 89,000 shareholders and has delivered an annualised total shareholder return of 6.2% over the past decade.

Australian Foundation Investment Company (ASX: AFI) 

AFIC's 10-year returns are almost a carbon copy of Argo's, coming in at 6.5%, and the similarities don't end there. AFIC is even older than Argo, established in 1928, and similarly looks to invest over the long term, focusing on safety and dividend payments. Investing in AFIC gives exposure to Australia's top blue-chip shares, with its largest holdings in stocks such as BHP Group Ltd (ASX: BHP), Commonwealth Bank of Australia (ASX: CBA), and CSL Ltd (ASX: CSL).

Washington H Soul Pattinson & Company (ASX: SOL)

Soul Patts, as this investment outfit is generally known, has hit it out of the park over the past 12 months, delivering shareholders a return of 31.7%, and 14.4% over the past decade. The fund boasts that it has not missed a dividend payment since it was listed in 1903 and has increased dividend payments in each of the past 24 years.

WAM Leaders (ASX: WLE)

This fund looks to invest in large-cap companies "with compelling fundamentals, a robust macroeconomic thematic and a catalyst''. It claims to have returned 12.5% per annum since May 2016 and now manages just under $2 billion, so it must be doing something right. Currently, the fund's fully-franked dividend yield is sitting at 7%.

Ophir High Conviction Fund (ASX: OPH)

This fund looks to find high-quality companies which are generating good cash returns before the rest of the market catches on, or in their own words, when they are "typically under-researched and undervalued by the investment market''. The fund has notched up more than 300% in total net returns since inception in August 2015 and an impressive 26.7% over the past 12 months.

The post These are the five stocks I'd build a long-term portfolio around appeared first on The Motley Fool Australia.

Ophir Asset Management finds ASX shares that look like they can significantly grow earnings over the long term. But, this investment manager likes to look across a range of industries to find opportunities.

The investment team recently went through some of its holdings within the Ophir High Conviction Fund (ASX: OPH) and discussed what it likes about them, with a particular focus on the first ASX share.

AUB Group Ltd (ASX: AUB)

This is a business that provides insurance broking, underwriting and risk services in Australasia. Ophir noted that its recent FY22 result was at the top end of market expectations and guidance for next year was "better than expectations".

Ophir said that a unique element of the business is that it partners with local management teams of acquired businesses and adopts an owner-driven model to try to deliver the best outcomes for clients. It services around one million clients across 500 locations.

One of the things the fund manager likes is the resilience of the ASX share's earnings because small and medium enterprises are "unlikely to cancel their insurance cover in market downturns as it is a core pillar of any business, much like accounting". The fund manager pointed out that AUB performed well during the GFC.

Ophir said that not only is it resilient, but it has grown earnings strongly. Some peers have grown at a similar rate. These businesses can use both organic growth and acquisitions to grow.

It thinks it can grow its broker and agency margins, which lag competitors. The fund manager pointed out there is a valuation gap compared to peers. Historically, its price/earnings (P/E) ratio has traded in line with Steadfast Group Ltd (ASX: SDF) and PSC Insurance Group Ltd (ASX: PSI). A gap has formed, which Ophir suggested could be due to the acquisition of Tysers.

The fund manager suggests there is more upside than expectations for the ASX share because management has been "conservative" with guidance and synergies.

Mineral Resources Limited (ASX: MIN)

Mineral Resources operates as a mining services and processing company in Australia, China and Singapore. It is also a producer of iron ore and lithium. This is one of the few resource businesses that Ophir is invested in.

The business' lithium result was "very strong" in FY22, according to the fund manager. The company has also announced plans for its Ashburton projection which "should increase the production rate of iron ore whilst also materially reducing average costs".

Life360 Inc (ASX: 360)

Life360 is an ASX tech share that offers a service that aims to ensure the safety of family members.

Ophir said that it delivered a "strong" recurring earnings beat in its recent result and that a price increase was announced for its membership base.

The investment team said they believe the business will reach breakeven in the near term.

In that update, Life360 said:

We expect Life360 to be on a trajectory to consistently positive adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) and operating cash flow by late calendar year (CY) 2023, such that we record positive adjusted EBITDA and operating cash flow for CY24. This trajectory could be further assisted by the positive impact of potential future price changes.

The post 3 ASX shares that are great-value buys right now: fund manager appeared first on The Motley Fool Australia.

Yet expert investors are scouring the market for opportunities. One of these is Andrew Mitchell from Ophir Asset Management, which runs a few different funds including Ophir High Conviction Fund (ASX: OPH).

Speaking to The Australian, Mitchell outlined the problems the ASX share market is seeing, the types of companies he's avoiding, and whether it's time to start investing yet.

Why is the ASX share market being pummelled?

The main problem boils down to inflation, caused by various factors including the impacts of the COVID-19 pandemic and the Russian invasion of Ukraine.

There has been plenty of selling action by investors recently but, according to Mitchell, there "isn't sufficient evidence" to suggest that we're at the recovery stage yet for ASX shares. He said he wouldn't be surprised to see a bear market rally. In other words, a short-term rise in shares.

Investors also have to contend with the conundrum of how hard central banks will have to go to bring inflation back under control. Mitchell said this to The Australian:

The global economy is slowing and inflation is stubbornly high. It would take a brave person to say the share market is out of the woods at the moment. Although some indicators suggest market sentiment is almost as pessimistic as mid-June, we're seeing increased signs of economic stress, including the jump in UK government bond yields on Friday and the spike in spreads on US junk bonds.

The market is focused on core inflation. How much does the Fed need to lift rates before they are satisfied that aggregate demand will slow? We are all hopeful for a Fed pivot, but with their credibility on the line they may talk tough for longer than everyone expects.

For the US economy, he's expecting this inflation fight to end in recession. He contends the Fed will "likely go too far" because inflation is the central bank's "number one priority, growth is a far second".

ASX shares to avoid

The investment style of Ophir means it's willing to look at most sectors for opportunities.

In terms of investments to avoid, Mitchell doesn't want to invest in businesses with little pricing power, nor those carrying a lot of debt.

He thinks that while the ASX share market has already experienced the sell-off, investors will also start seeing companies issuing earnings downgrades.

Ophir is "very cautious" on consumer discretionary businesses, companies leveraged to the housing market, and financials. It believes they may not recover until inflation is "well under control". This may mean that a recovery isn't seen until inflation is below 2%. This will likely also mean a reset of corporate earnings expectations.

According to Ophir research, over the past 16 bear markets, the share market has bottomed six months before corporate earnings do.

Where are the opportunities?

While he didn't name specific ASX shares, Ophir is looking for businesses that have good management and can grow "no matter what".

It believes businesses making acquisitions at this time could also be interesting. On that point, Mitchell said:

Historically, times like this are the best for making money. You just need nerves of steel. We're focused on companies that are making great acquisitions now that the market won't acknowledge because it's obsessed with only the most defensive businesses.

He also wants to find businesses that have been harshly sold off, while their peers haven't been punished as severely.

Ophir also suggests that choosing good cash-generating businesses will lead to good results. The idea is that the best businesses will emerge stronger than weak competitors.

At 30 June 2022, the five largest holdings (in alphabetical order) in the Ophir High Conviction Fund were: AUB Group Ltd (ASX: AUB), EBOS Group Ltd (ASX: EBO), NIB Holdings Limited (ASX: NHF), Omni Bridgeway Ltd (ASX: OBL), and Resmed (ASX: RMD).

The post 'Historically, times like this are the best for making money': expert appeared first on The Motley Fool Australia.

Over decades (in most cases), these Australian companies have built up their presence, both in our day-to-day lives, as well as in the minds of investors. We've seen growth and plenty of dividends and franking credits from all of them over the years.

But what about names such as WAM Capital Limited (ASX: WAM), Ophir High Conviction Fund (ASX: OPH), or Naos Emerging Opportunities Company Ltd (ASX: NCC)?

It's doubtful these names have the same kind of impact on any investor's psyche as the names listed above. But perhaps for an ASX dividend investor, they should. After all, CBA, Woolworths, and Telstra currently have trailing dividend yields of 3.54%, 2.39%, and 3.00% respectively.

But WAM Capital currently has 7.31% on the table. Naos is offering up 7.43%, while Ophir High Conviction Fund currently boasts a whopping yield of 13.22%.

These ASX shares certainly aren't household names in the same league as CBA or Woolies. But they certainly have something to say when it comes to dividends. So what's going on here? How can these shares offer such stupendous yields?

Why do some LICs offer such big dividend yields?

Well, it comes down to their nature. See, all of those companies are listed investment companies (LICs). That means they aren't the traditional businesses we are used to seeing on the ASX.

A LIC functions more like a managed fund than a business. It invests its capital into other investments for the benefit of its shareholders. WAM Capital, for instance, invests in a portfolio of ASX shares that WAM describes as "undervalued growth companies".

A traditional company like Telstra funds its dividends from its pool of profits. But a LIC can fund its dividend payments from two sources. It is entitled to the dividends and franking credits of its underlying holdings for one. So if a LIC like Ophir or Naos receives a dividend from a company in its portfolio, it can pass it on to its own shareholders.

But a LIC can also bank the profits it makes from buying and selling these shares. If it does so successfully, it can also use these funds to boost its dividends to its own shareholders. That is why we often see LICs like WAM Capital and Ophir with hefty trailing yields.

Of course, this doesn't always translate into massive profits for investors. For example, despite its 7.31% dividend yield right now, WAM Capital has only given a total return of 1.7% over the 12 months to 31 March (not including fees either). That compares poorly against its benchmark All Ordinaries Total Accumulation Index (ASX: XAOA), which returned 15.5% over the same period.

But food for thought, nonetheless.

The post 13%? Why some ASX LICs have such high dividend yields appeared first on The Motley Fool Australia.

It gives us the opportunity to buy plenty of quality Australia and New Zealand businesses. There are also numerous businesses that are headquartered overseas, but we can buy their shares on the ASX.

Here are some great reasons why it makes sense to invest in ASX shares right now:

Long-term benefits

The ASX share market has been one of the best performers over the past century, largely thanks to the strength of the Australian economy and the underlying businesses.

Australian shares have returned an average of around 10% per annum over the long-term. That's a solid number and compounds wealth at a very nice pace when you re-invest the dividends.

ASX shares that are part of the Australian taxation system and pay dividends also offer the potential benefit of franking credits, which is a refundable tax credit to ensure that taxpayers don't pay tax twice (once at the company level and again in the hands of individuals).

So, Australian shares have offered good returns in the past and continue to offer tax-advantaged income.  

I don't see the benefit of investing in bonds at the moment when asset prices are so high and interest rates are so low.

Strong COVID-19 and economic position

Australia is in a good position, both with COVID-19 and economically with a pretty robust GDP compared to other countries.

Economies don't exactly match the performance of business profits or share prices, but a good economy is undoubtedly a good thing for the ASX share market. A good COVID-19 position will also allow most businesses to be open and operate normally, and consumers will feel more comfortable too.

Many ASX retail-related shares have seen strong performance over the past six months such as JB Hi-Fi Limited (ASX: JBH), Eagers Automotive Ltd (ASX: APE), Wesfarmers Ltd (ASX: WES), Adairs Ltd (ASX: ADH) and Harvey Norman Holdings Limited (ASX: HVN).

Overseas investors may also see ASX shares as a safe haven compared to what's happening in Europe and the US. Particularly if the US election stirs things up.

Great investment options

I think there are a number of great ways to invest in ASX shares.

Exchange-traded funds (ETFs) aren't a bad option. There are ETFs you can buy for ASX share exposure like Vanguard Australian Shares Index ETF (ASX: VAS).

But there is too much focus on big ASX banks and resource businesses with ASX index ETFs in my opinion. Commonwealth Bank of Australia (ASX: CBA), Westpac Banking Corp (ASX: WBC), National Australia Bank Ltd (ASX: NAB) and Australia and New Zealand Banking Group Ltd (ASX: ANZ), BHP Group Ltd (ASX: BHP), Fortescue Metals Group Ltd (ASX: FMG) and Rio Tinto Ltd (ASX: RIO) make up around half of the index. That's not great diversification in my opinion.

There are better ways to invest in ASX shares in my opinion. For starters, there are quality managers who invest in ASX shares which can provide exposure such as WAM Microcap Limited (ASX: WMI), Future Generation Investment Company Ltd (ASX: FGX) and Ophir High Conviction Fund (ASX: OPH).

I also think there are a number of individual ASX shares that can deliver attractive long-term returns like Pushpay Holdings Ltd (ASX: PPH), Brickworks Limited (ASX: BKW), Washington H. Soul Pattinson and Co. Ltd (ASX: SOL), A2 Milk Company Ltd (ASX: A2M), Bubs Australia Ltd (ASX: BUB), Temple & Webster Group Ltd (ASX: TPW) and Redbubble Ltd (ASX: RBL).

The post Why it makes sense to invest in ASX shares appeared first on The Motley Fool Australia.

However, the difference between a REIT or ETF and an ASX LIC is the structure of the business. LICs are generally limited companies, while ETFs and REITs are explicitly trusts. There are a range of differences but for me the most important is that a LIC is like any other company. Therefore, you buy shares not units. Meaning, you buy a part of the company rather than a unit in the underlying assets.

Hearts and Minds Investments Ltd (ASX: HM1)

Hearts and Minds is a great ASX LIC which listed during 2019. The fund managers forgo all fees, instead donating to leading Australian medical institutes. It has a concentrated portfolio in 25-35 Australian and global securities. These are based on the highest conviction ideas from leading fund managers.

In year to date trading, Hearts and Minds is up by 6.71% despite the coronavirus market crash in March. The company achieved a growth of 7.2%, compared to 3.4% in the MSCI World Net Total Return Index (AUD).

This LIC is currently trading at less than its net tangible assets (NTA) value per share of $3.71.

Ophir High Conviction Fund (ASX: OPH)

The Ophir High Conviction fund provides shareholders with a concentrated fund on companies outside of the S&P/ASX 50 Index (ASX: XFL). The company's investment philosophy is very fundamental. That is, a bottom up approach to identify under-valued ASX shares. Particularly those with existing and proven business models and large, or growing, addressable markets.

What originally attracted me to this ASX LIC is that both founders have all of their liquid investments here. In year to date trading, this ASX LIC's share price is up by 21.69%. It is trading at a price to earnings ratio (P/E) of 11.08, and at a slight premium to its NTA per share of $2.98.

The Ophir LIC portfolio uses the S&P/ASX Mid Small Index (ASX: AXMSA) as a benchmark. In FY20 the LIC delivered a growth rate of 12.7% against a benchmark growth rate of -5.3%.

WCM Global Growth Ltd (ASX: WQG)

WCM Global is a $200 million ASX LIC with an estimated NTA per share of $1.48 at the time of writing. This LIC also focuses on fundamental company analysis. However, it places a lot of value in the organisation's moat, or competitive advantages. In FY20, the LIC delivered a return of 17.6% for the year. Outperforming its benchmark MCSI All-Country World ex Australia Index by 12.9%.

This ASX LIC provides access to a range of giant global technology companies. For instance, it includes companies like Shopify Inc (NYSE:SHOP), Tencent Holdings Ltd (HKG: 0700), and Mercadolibre Inc (NYSE:MELI). At close of trading on Wednesday, this ASX LIC is selling for a P/E of 9.32.

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