AFIC plans spending spree

AFIC is preparing to invest about $220 million to take advantage of beaten-down stock prices. The fund believes many shares are trading at a deep discount after nearly two years of losses, and it plans to pick up assets for the medium to long term while being cautious about the short‑term outlook.

AFIC manages more than $4.3 billion in assets. The company counts sharemarket veteran Bruce Teele as chairman and Ross Barker as managing director, who speaks publicly about the fund's strategy and market views.

AFIC believes stocks are trading at a deep discount following extended market losses. Despite global headwinds, the Australian sharemarket had gained more than 5% year‑to‑date at the time of the article, and AFIC plans to use negative market sentiment to buy quality holdings for the medium to long term.

AFIC completed a $223 million convertible note raising that was heavily subscribed by investors. The notes trade on the Australian Securities Exchange and are similar to debt instruments, providing annual payouts while offering a convertible feature.

AFIC reported a 7% drop in first‑half profit to $113.6 million. Most of the decrease was due to a fall in the market value of the fund's investment portfolio rather than a decline in dividend income from holdings.

AFIC's mostly blue‑chip portfolio fell 7.8% in the half‑year, while the S&P/ASX 200 Index fell 9.7% over the same period, meaning AFIC outperformed the benchmark decline.

Yes. AFIC declared an interim dividend that was fully franked and unchanged from the same time last year, indicating the company continued to return income to shareholders despite the fall in portfolio valuation.

AFIC's managing director Ross Barker said many retail investors remain 'shell‑shocked' by steep losses since last April and are holding back from equity markets. AFIC itself says it is cautious in the short term but is looking for medium‑to‑long‑term buying opportunities.