LICs and fair value: A guide

Here’s what I think investors should pay attention to when looking at LICs.

Summary: Listed Investment Companies are powerful vehicles that give investors exposure to both local and overseas markets. When there are more buyers wanting in to an LIC than sellers, the share price can exceed the value of assets held in the portfolio. When an LIC is trading “below fair value”, this could be for a number of reasons, including poor investment performance, lack of investor awareness about the LIC, or lack of transparency around the investment process. 

Key take-out: LICs, like all investments, are more likely to deliver returns if investors buy them with long term goals in mind.

Key beneficiaries: General investors. Category: Listed investment companies.

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