LICs group to counter managed funds
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Philippa Yelland is a journalist with InvestorDaily, a Morningstar publication.
Listed investment companies (LIC) are attempting to form an association so the sector can speak with greater authority when called on by regulators, and also to counter the perceived attractions of managed funds.
Whitefield chief executive Angus Gluskie said the main barrier was to find an equitable structure for voting and for charging membership fees.
The new and as yet unnamed association would have about 50 members and would be more representative than the existing Australian Listed Investment Companies Association, Gluskie, who is also a spokesperson for the yet-to-be-formed association, said.
The Australian Listed Investment Companies Association had eight members and was more than 15 years old, he said.
Those eight members were an "informal association which has 70 to 75 per cent of the LICs market," he said, "and it's been easy to liaise with seven other people".
"But 50 members will take more time and therefore costs," he said.
LICs were having to compete with managed funds, which had the advantage of a "very unified reporting standard," he said.
He said LICs did not have that unity and "we need to use a common language to compare and contrast, which should help advisers and investors".
An issue that confronted LICs was that their performance appeared understated when compared with managed funds' results, he said.
"This is because we're reporting after-tax returns," he said.