As part of this exercise I would like to make a contribution.
I hold AFI, VGS & MVW.
Firstly, I'm not too sure what benefit AFIC's international holdings have brought to its shareholders? They're still dabbling it seems. I purchased VGS units many years ago at an expense ratio that is similar to that of AFIC's MER. My distribution is greater than that of AFIC based on my average purchase price. Yes its true that it's less tax effective, but who cares when the capital growth has totally squashed that of AFIC since inception. I think that over 10 years the capital growth alone has bettered that of AFIC by about 115%.
Now back to AFIC. Because we are all so insecure, we all want security and the number one reason holders in AFIC will tell you why they hold AFIC is this;
"Fully franked, smoothed out dividends"Now lets look at an ASX 200 Index tracking ETF. For this exercise, I've chosen STW - which I do not hold but have chosen this fund because it's been around the longest which means it's been through many cycles - including the GFC. Since 2001, AFIC has outperformed STW by a total of 18%.
That's pretty good. Since 2001 AFIC has outperformed STW by approx. 0.7% a year.
So I wondered what the performances have been like since the start of the 2007 calendar year and then the end of the 2009 calendar year for obvious reasons. Since 2007 AFIC's share price alone has appreciated by approx 43%. Meanwhile, STW's share price appreciation has been approx 31%.
AFIC still looks to be a way better investment but still pretty crappy returns over 17 years by both funds. But since the end of 2009 through to the end of the 2024 calendar year, in 15 years AFIC's share price return has been approx 41% against STW's share price return of 64%. AFIC's gone nowhere!
Let's get back to those
"Fully franked, smoothed out dividends". I'll even chuck it in a table so it's easy to compare:
| Fund | Current MER | Dividend frequency | 2009 Total Distribution (inc. franking) | 2024 Total Distribution (inc. franking) | Dividend Growth % (inc. franking) 2009 - 2024 |
|---|
| 1 | AFIC | 0.15% | Semi annual | $0.30 | $0.3714 | 23.8% |
|---|
| 2 | STW | 0.05% | Quarterly | $1.8497 | $3.4815 | 88.28% |
|---|
This table clearly shows that AFIC's dividend growth hasn't kept up with inflation.
AFIC as an entity manage four separate funds. The cumulative MER of the four funds is 1.69%. Did you know that in one trade you can get access to many of the mid caps and large caps held within those funds by simply purchasing MVW at an expense ratio of 0.35%.
From MVW's inception in 2014, MVW's dividend payout has increased by over 600%. Meanwhile, whilst the people charged with managing
Djerriwarrh,
Mirrabooka and
Amcil have all CUT their dividends since 2014See for yourself;
https://www.marketindex.com.au/asx/mir?src=search-allhttps://www.marketindex.com.au/asx/amh?src=search-allhttps://www.marketindex.com.au/asx/djw?src=search-allI'll leave you with this telling price chart comparing the performance of AFIC's stable as opposed to MVW (not inclusive of reduced or stagnant dividend growth); There's more than one way to skin a cat...
MVW vs AFI / DJW / AMH / MIR
Not surprisingly not even Wilson's (WAM/WLE/WGB) have managed to outperform MVW over the journey since inception in 2014.
My children's portfolio's consist of three holdings: WES / NDQ / MVW. I first purchased AFI for my kids in 2021 but quickly sold out in favour of the former three holdings listed. Best thing I've done for them. Can't build a deposit for a house by investing in AFIC. Had I kept their AFIC shares, they'd be down by about -4% on invested capital. In that time, WES is up +40%, NDQ +60% and MVW +21%.
Why anyone who is young would invest in AFIC is totally beyond me. Like I said, more than one way to skin a cat...
(20min delay)