Ann: Evening Shareholder Information Meeting - Presentation, page-5

yes l choose AFI/ARG over index funds, have been accumulating both. why?

1) because for people who know very little about the market eg how to adjust a cost base, having to look out for annual tax statements AFI/ARG are easier. Probably the most simple share management tool. It follows the KISS principle
2) because l want dividends smoothed across the years and decades. Index funds are fantastic until the next GFC event, governments could stop bank dividends, but that won’t matter with LIC’s.
3) if you don’t need to sell your LIC’s who cares if there is a discount to NTA. They are chosen not as trading vehicles rather stable dividend generating vehicles (annuities?). If they are taken off market - would it matter?
4) the Au market is really very narrow. Buy CBA BHP CSL don’t you already own the market? AFI are now investing both overseas and in Australia further diversify their base.

I know shares reasonably well and monitor my performance against the market but am preparing my estate to hold the very large LIC’s not index funds. A real life example perhaps.