Listed investment companies have really come into fashion over the last five to ten years. The share market is a complicated beast to keep on top of, which makes passive long-term investments much more attractive. LICs are a great way to do this.
The whole purpose of listed investment companies is to invest in other businesses and generate returns for shareholders. Some of the largest LICs in Australia have some of the longest histories and solid dividends. Here are two of the biggest:
Argo Investments Limited (ASX: ARG)
Argo has a market capitalisation of $5.5 billion and has been around since 1946.
At 31 July 2017, the monthly update revealed that its top five holdings were Westpac Banking Corp (ASX: WBC), Australia and New Zealand Banking Group (ASX: ANZ), Commonwealth Bank of Australia (ASX: CBA), Wesfarmers Ltd (ASX: WES) and BHP Billiton Limited (ASX: BHP).
Argo management recently revealed its full-year results and increased the final dividend by 3.2%. It currently has a grossed-up dividend yield of 5.55%.
Australian United Investment Company Ltd (ASX: AUI)
Australian United has a market capitalisation of around a billion dollars and has been operating since 1953.
At 31 July 2017, its latest update showed that its top five holdings were Commonwealth Bank, ANZ, Westpac, National Australia Bank Ltd. (ASX: NAB) and Wesfarmers.
Its holdings are pretty similar to Argo but there are differences between the two, which is why there are performance variances over the long-term.
Australian United hasn't revealed its full-year results yet but it has a trailing grossed-up dividend yield of 5.75%.
Foolish takeaway
I'd feel much more comfortable owning shares of the above two LICs rather than individually owning shares in Australia's biggest companies. I imagine both of these LICs will be paying dividends for a long time after I check my portfolio for the last time.
