The Australian Foundation Investment Co. Ltd (ASX: AFI) share price hit a record high of $6 today as the listed investment company continues to benefit from relatively strong global equity markets over the year to June 30 2017.
The company's flagship fund has around $6.8 billion under management, which means it has little choice but to invest at the blue-chip end of the Australian equity market.
Its top four holdings include three of the four major banks in Commonwealth Bank of Australia (ASX: CBA), Westpac Banking Corp (ASX: WBC) and National Australia Bank Ltd (ASX: NAB), with giant miner BHP Billiton Limited (ASX: BHP) the remaining top holding.
For the six-month period ending December 31 2016 the company posted a net profit of $118.3 million and paid a dividend of 10 cents per share on earnings of 10.4 cents per share. Its portfolio returned total growth of 8.6% over the period and has returned 7.2% per annum for the 10 years to December 31 2016.
It currently sells for 27x annualised earnings with a trailing 4% dividend yield, plus the tax effective benefits of franking credits.
