Reasons to invest in LICs with nabtrade
Great value
Enjoy great brokerage and a competitive high interest rate for your cash.
One destination
Access to one platform for all your investments.
Real-time data
Stream live ASX data so you can make real time investment decisions.
About Listed Investment Companies
Listed investment companies are listed managed funds where the investor owns shares in the company that holds the investment portfolio, rather than units in a fund of the underlying asset.
The main reasons investors buy LICs are for: capital growth, dividend income and professional management.
LICs differ from other investments in a few ways:
- LICs are closed-end vehicles - LICs don’t regularly issue new shares or cancel shares as investors join and leave the fund. Instead, investors buy and sell to each other on an exchange such as the ASX. This means a LIC typically operates with a fixed pool of capital, allowing the manager to concentrate on investment selection without having to factor in the possibility of money leaving the fund unexpectedly.
- Operate under a company structure - LICs operate under a company structure as opposed to a unit trust structure. They usually distribute their income by way of fully franked dividends on which the company tax rate is already paid.
- Can trade at a discount or premium to net tangible assets (NTA) - LICs may deviate away from their NTA for a number of reasons including market conditions, their size, dividends, corporate governance, fee structure and supply and demand.
Pricing
| Trade size | $1,000 | $5,000 | $10,000 | $20,000 | Over $20,000 |
| Brokerage | $9.95 | $14.95 | $19.95 | $19.95 | 0.11% of trade value |
Benefits
Capital gains
The value of a LIC may increase over time based on factors including the manager’s skill, the performance of underlying assets and its shares trading at premium.
Dividends
LICs can distribute some of their profits by way dividends, often fully franked.
Inherent diversification
LICs can help reduce your investment risk as they typically invest in a diversified portfolio of stocks and/or other assets.
Risks
Capital losses
The value of a LIC may decline due to factors including investment decisions made by the manager, the performance of underlying assets and its shares trading at discount.
Fees
LICs charge annual management fees which are taken out of the profits of the company regardless of performance, and in some cases may also charge performance fees.
Get started with nabtrade
Every new nabtrade customer receives:
- A domestic trading account
- An international trading account
- An integrated cash account
Additional service options include:
- nabtrade High Interest Account
- nabtrade IRESS ViewPoint
- NAB Margin Loan
- Self Managed Super Fund setup and management services
Get started today
- Apply - Complete the application form - you can select from an Individual, Joint, Company or SMSF/Trust account.
- Add cash to your account - watch the tutorial.
- Start trading - Login to nabtrade on desktop or download our app.
Funding options for LICs
There are two ways to fund your investment:
Add cash to your account
Every nabtrade account comes with a linked cash account.
Borrow to invest
With a NAB Margin Loan you can borrow to invest.