I expect on balance discounts on LICs to continue to contract in 2021, mainly due to a lack of supply. It is therefore no surprise that I am not expecting a great deal of LIC IPO activity next year. There was controversy surrounding sales commissions and LIC IPOs that got plenty of attention in 2019. (This was after a flood of new issuance in the few years prior, with many poor performers). For this reason, I do not think financial planners and investors have great appetite yet to take the plunge into new closed end fund products.Continue reading “ASX LIC TRENDS FOR 2021 IN TERMS OF DISCOUNTS / PREMIUMS & POTENTIAL IPOs”
Advantages of these ASX LICs well documented from the likes of the Barefoot Investor and financial media in general.
The positives of the older, low fee ASX LICs I feel are very well known and covered. They have usually got a good run in the financial press from the likes of the Barefoot Investor and Peter Thornhill, and deservedly so. I personally think they have been excellent investment products for so many for such a long time. I particularly like the positive influence they have had on investors helping them with the behavioural aspects. i.e. sticking the course and seeing the benefits of compounding, highlighting dividend returns and benefits from not overtrading, including taxation benefits.
Now for the other side..
Now for the section where I might receive some negative feedback!
How to invest for a living
Before you go “all-in” on a portfolio full of the highest franked dividend payers on the ASX, read below to consider being diversified from a political and taxation standpoint. Likewise be wary of going “all-in” to other investments based solely on current taxation incentives in place.
When I come across articles about how Australian investors need more diversification it often does not refer to potentially changing tax laws. There is a bit of overlap with these themes but there are different issues to consider.