What is a Listed Investment Company (LIC)?
A Listed Investment Company (LIC) in Australia is a closed-ended investment vehicle structured as a public company. LICs are traded on the Australian Securities Exchange (ASX), similar to any other company stock.
Key characteristics of LICs include:
Taxation: Any profit generated from the LIC's investing activities is taxed at the company rate before dividends are paid to shareholders.
Dividend Policy: The directors of the LIC determine the level of dividends paid. They have the flexibility to pay out more than the underlying income levels, sometimes through a return of capital, or they may retain surplus profits after tax.
Franked Dividends: LICs have the ability to pay franked dividends, which means a portion of the company tax paid by the LIC can be passed on to shareholders as franking credits, reducing their personal tax liability.
What is a Listed Investment Trust (LIT)?
Listed Investment Trusts (LITs) are also closed-ended investments, similar to LICs, but they are established as trusts rather than companies.
Key characteristics of LITs include:
Distribution of Income: As trusts, LITs are generally required to distribute all net income and realized capital gains to investors on a pre-tax basis. The end investor is then responsible for paying any tax on these distributions.
Franking Levels: The distributions paid by an LIT carry the franking levels allocated by the underlying investments within the trust.
Where can I Find Listed Investments Companies Monthly (LICs) performance report on the Investor Website?
To access the Morningstar's LICs Monthly Performance Reports, follow the below steps:
Steps to Access the Report when Signed In:
From the left navigation menu, click Discover Investments.
Select Funds from the options listed under Discover Investments.
On the right-hand side of the Funds page, click LICs Monthly Performance to open the latest report.
You can also directly access the list of Listed Investment Companies via this link: https://premium.morningstar.com.au/investments/screener/FC/lics
For the monthly performance report itself, you can use this direct link: https://premium.morningstar.com.au/insights/topic/lics%20monthly