Tony Kynaston - A Look at LICs

· Podcast Episodes
Tony Kynaston - QAV investing podcast

ETFs are the talk of the town but LICs are another way of gaining exposure to a basket of shares with a single trade. Tony Kynaston from the QAV Investing Podcast (an SFB recommended podcast to learn more from) joined us to explain LICs and how to use them as part of a diversified portfolio.

What's the difference between an LIC and an ETF?

An LIC starts with a fixed amount of money. The manager then invests that fixed amount of money in a basket of shares according to their investment thesis. That amount of money, or capital invested, doesn't change when someone buys or sells a share. In the case of an ETF, every time someone buys or sells units in that ETF, the manager buys or sells the shares that make up that ETF.

Gold ETFs are a good example. Some of them are backed by physical gold that sits in a vault in London. As more investors buy units, more gold is shovelled into that vault. When investors sell, the gold is removed from the vault.

This is why LICs are referred to as closed funds, while ETFs known as open funds.

The Big 3 Australian LICs - AFIC, ARGOMilton. We also discussed Wilson Asset Management's LICS, FGX (another Wilson Fund) and Hearts & Minds

Finding value by buying LICs at a discount. Tony uses the Morningstar Monthly LIC Report to find LICs at bargain prices.

Tony's investing ladder - 4 steps for starting out in the investing market:

  • Step 1: Invest in index funds whether ETFs or LICs
  • Step 2: Look for discounted LICs - this is when an LIC is trading at a lower price than it's Net Asset Value (NAV).  Helps you to learn how to value a company.
  • Step 3: Create your own index fund by buying the top 20 stocks - 70% of the market weight of the ASX 200 is in the top 20 stocks so ne need to buy all 200. 

Here's a link to a list of those top 20 shares.

  • Step 4: Start to take an opinion on which of those stocks is going to go up and only buy those.

Investing can be a daunting task, but with QAV investing, it doesn't have to be. QAV takes the guesswork out of investing and helps you make informed decisions. And now, with our limited-time promotional offer, you can enjoy even more benefits!

Use the coupon code SFB at checkout and receive 20% off the QAV Club Plan, or a a free month of QAV Light.

With your QAV investing subscription, you'll also receive:

  • A weekly podcast that covers the latest stock market news and trends
  • A detailed weekly stock analysis report, highlighting the best investment opportunities
  • Access to our exclusive member-only discussion forums, where you can connect with other like-minded investors and share tips and strategies.

Investing with QAV is a smart choice, and with our promotional offer, it's an even smarter one. Don't wait, use the coupon code SFB at checkout and start investing with confidence today!

TONY KYNASTON is a multi-millionaire professional investor thanks to the QAV checklist he developed . Tony's knowledge and calm analysis takes the guesswork out of share market investing.  Use the coupon code SFB for a 20% discount on QAV Club plans or a free month of QAV Light.

Disclosure: The links provided are affiliate links. I will be paid a commission if you use this link to make a purchase. You will receive a discount by using these links/coupon codes. I only recommend products and services that I use and trust myself or where I have interviewed and/or met the founders and have assured myself that they’re offering something of value.

Shares for Beginners is for information and educational purposes only. It isn’t financial advice, and you shouldn’t buy or sell any investments based on what you’ve heard here. Any opinion or commentary is the view of the speaker only not Shares for Beginners. This podcast doesn’t replace professional advice regarding your personal financial needs, circumstances or current situation.