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Australian Foundation Investment Company (AFI)

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Australian Foundation Investment Company (AFI)

With indices continuing on to record highs, AFI seems to be lagging (although it has caught up a bit recently). Is there a reason you can think of for this? Or is there potential for it to outperform the index in the short-medium term? (I guess I'm wondering whether MM would see it as a better risk/reward right now than something like (STW) Thanks

Answer

Hi Brent,

The issue comes down to the holdings of AFI as it does with all investment vehicles/fund managers. This $9.57bn company has underperformed its benchmark (the ASX300 Accum Index) during most timeframes.

This listed investment company (LIC) has a reputation as a low cost, diversified and conservatively managed portfolio that pays out regular fully franked dividends, though, performance remains the key to any manager, AFI is no different.  Total returns over a 10 year period shows a total under performance of 25% over that time period.  On a shorter-term view (1-year), AFI has booked a total return (inclusive of dividends) of 12.43%, which over ~10% below the market, as shown below.

  • We like to eat our own cooking, so our money is invested in the MM Portfolios, including the Active Growth and Active Income Portfolios.
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AFI vs Benchmark
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