|A Diversified Portfolio Through a Single
Through investing in a LIC, investors gain exposure to a range of
underlying securities. This reduces risk, as the investor’s funds are
not tied closely to the fortunes of one security. You can begin
investing in a LIC with a few thousand dollars.
Appreciation and Income
The philosophy of each LIC differs. However, most LICs offer the
opportunity for capital appreciation as well as regular dividends. As
the NTA of a fund rises, it can usually be expected that the market
price of the LIC will rise as well.
Relative Consistency in Returns
The closed-end nature of LICs means their managers can concentrate on
investment selection without having to factor in the effects of money
coming into or leaving the fund. Research shows that this can improve
Due to their company structure, LICs can also hold back returns
from one year to the next. This allows the ability to ‘smooth out’
dividend flows, making them more predictable over time.