Benefits of a Listed Investment Company ASX

6 Priceless Benefits of a Listed Investment Company ASX

Are you looking for new investment opportunities? You can consider the Australian Stock Exchange (ASX), founded over three decades ago in 1987. This feature makes investments in a listed investment company asx a practical option over other investment options. It’s important to consider the various benefits of investments in LICs, include the following:

Benefits of a Listed Investment Company ASX
Benefits of a Listed Investment Company ASX

International Markets

With LICs, you have the option to invest in international shares. You can find various ones that make investments in international markets, including the United States (US) and United Kingdom (UK).

This option provides Australians with the opportunity to invest in some of the world’s largest economies. The US is the world’s biggest economy, while the UK is ranked among the Top 10 list.

Investing in global companies provides individuals the ability to leverage local and international brands. Through diversification, you can reduce risks by making a wider range of investments.

Another benefit is you can also benefit when the local economy or companies experience downturns. This situation is normal, although it can harm your investment portfolio. So diversifying your portfolio to include international portfolios can help to boost returns during such situations.

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Fund Management

LICs use a close-ended structure for fund management. This feature helps reduce the risk of a massive number of investors joining or leaving funds. If you’re making a long-term investment, this is critical since it can make your investment more secure. This benefit includes options like retirement for funds since their long-term investments that you won’t need until your golden years.

Market Exposure

LICs can provide a good amount of exposure to international markets. These options can include ones like Berkshire Hathaway, which is among the US’s Top 5 largest companies, according to Fortune.

Consider that about one-quarter of Australia’s superannuation industry includes foreign investments. This provides excellent investment opportunities that include options like stocks and bonds, for example.

Managed Fund

Another benefit of investing through LICs is when you buy shares, you are purchasing a share in the investment company’s total assets. Fund managers make crucial decisions to boost the portfolio’s value. This makes the option practical for long-term investments.

  Portfolio Diversity

This is especially important when making long-term investments like superannuation funds. More diversification means the fund includes shares from several companies. Thus, when you purchase LIC shares, you automatically get a diversified portfolio.

This provides several benefits since your investment won’t be based on a single company’s shares. In the long-term, this is a better approach for options like retirement funds, for example.

Taxation Benefits

This includes something known as “Franked dividends.” It boosts your returns by eliminating double taxation. The mechanics are the shareholders have already paid taxes on the dividends they received.

In fact, foreign investments are generally good investments in part due to tax benefits. The reason they’re provided is foreign companies welcome foreign investments in a global economy.

Meanwhile, the corporate tax rate in Australia is 30%, according to the Australian government. This is the rate investors must pay for dividends on investment bonds.

When making investments, one of the options is a Listed investment company asx. Some possible benefits include diversification, management, and taxation. You can also make foreign investments, which includes some of the world’s largest markets, including the USA’s AUD26+ trillion economy.

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