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Listed managed funds vs LITs & LICs

Question

You are looking to have an asx listed version of the growth fund. One of the challenges of lit’s is that they can often trade at a sizeable discount to NTA, especially smaller funds. Can you please advise what the fund will be doing to address this risk to investors. - Submitted by Greg

Answer

Hi Greg,

The Intelligent Investor team does intend to list the Intelligent Investor Growth Fund on the ASX. If anyone is interested in finding out more they can visit the expressions of interest page here.  

To answer your question, yes listed investment companies (LICs) and listed investment trusts (LITs) have a history of trading at a discount to their net asset value. It's very common amongst them. The listed version of the Intelligent Investor Growth Fund will not be a LIC or a LIT. It will be an exchange quoted managed fund (EQMF). Think of this the same way you would an exchange-traded fund (ETF).

ETFs and our listed managed funds have market makers who provide liquidity and keep the listed fund trading at its net asset value. It will not trade at a premium or a discount. Once the fund is listed you will be able to view the net asset value at all times via the fund page just like you can with the Intelligent Investor Ethical Share Fund here in the key details section. The net asset value is updated every minute. 

I hope this helps explain things, Greg.

Regards,

Mitchell Sneddon

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Mitchell Sneddon
Mitchell Sneddon
Head of Portfolio Services