3 ASX LICs that are destroying the benchmark

These 3 listed investment companies (ASX LIC) are up in year-to-date trading, despite COVID-19, and are smashing their benchmarks.

| More on:

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Listed investment companies (LICs) are very similar to exchange-traded funds (ETFs), or real estate investment trusts (REITs).  In every case there is a standalone fund dedicated to a specific purpose. For example, the Charter Hall Retail REIT (ASX: CQR) is dedicated to convenience retail centres, including petrol stations. An example ETF would be the Magellan Global Equities Fund (ASX: MGE). This invests in 20 to 40 of the worlds largest companies.

However, the difference between a REIT or ETF and an ASX LIC is the structure of the business. LICs are generally limited companies, while ETFs and REITs are explicitly trusts. There are a range of differences but for me the most important is that a LIC is like any other company. Therefore, you buy shares not units. Meaning, you buy a part of the company rather than a unit in the underlying assets.

Hearts and Minds Investments Ltd (ASX: HM1)

Hearts and Minds is a great ASX LIC which listed during 2019. The fund managers forgo all fees, instead donating to leading Australian medical institutes. It has a concentrated portfolio in 25-35 Australian and global securities. These are based on the highest conviction ideas from leading fund managers.

In year to date trading, Hearts and Minds is up by 6.71% despite the coronavirus market crash in March. The company achieved a growth of 7.2%, compared to 3.4% in the MSCI World Net Total Return Index (AUD).

This LIC is currently trading at less than its net tangible assets (NTA) value per share of $3.71.

Ophir High Conviction Fund (ASX: OPH)

The Ophir High Conviction fund provides shareholders with a concentrated fund on companies outside of the S&P/ASX 50 Index (ASX: XFL). The company's investment philosophy is very fundamental. That is, a bottom up approach to identify under-valued ASX shares. Particularly those with existing and proven business models and large, or growing, addressable markets.

What originally attracted me to this ASX LIC is that both founders have all of their liquid investments here. In year to date trading, this ASX LIC's share price is up by 21.69%. It is trading at a price to earnings ratio (P/E) of 11.08, and at a slight premium to its NTA per share of $2.98.

The Ophir LIC portfolio uses the S&P/ASX Mid Small Index (ASX: AXMSA) as a benchmark. In FY20 the LIC delivered a growth rate of 12.7% against a benchmark growth rate of -5.3%.

WCM Global Growth Ltd (ASX: WQG)

WCM Global is a $200 million ASX LIC with an estimated NTA per share of $1.48 at the time of writing. This LIC also focuses on fundamental company analysis. However, it places a lot of value in the organisation's moat, or competitive advantages. In FY20, the LIC delivered a return of 17.6% for the year. Outperforming its benchmark MCSI All-Country World ex Australia Index by 12.9%.

This ASX LIC provides access to a range of giant global technology companies. For instance, it includes companies like Shopify Inc (NYSE:SHOP), Tencent Holdings Ltd (HKG: 0700), and Mercadolibre Inc (NYSE:MELI). At close of trading on Wednesday, this ASX LIC is selling for a P/E of 9.32.

Should you invest $1,000 in Freelancer Limited right now?

Before you buy Freelancer Limited shares, consider this:

Motley Fool investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now... and Freelancer Limited wasn't one of them.

The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

And right now, Scott thinks there are 5 stocks that may be better buys...

See The 5 Stocks *Returns as of 30 April 2025

Daryl Mather has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and recommends Shopify. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Share Market News

The letters ETF with a man pointing at it.
Share Market News

3 fantastic ASX ETFs to buy with $1,000

These funds could be worth considering if you have money to invest in the share market.

Read more »

Businessman smiles with arms outstretched after receiving good news.
Share Gainers

Here are the top 10 ASX 200 shares today

It was a wonderful Wednesday session for investors today.

Read more »

Two male ASX 200 analysts stand in an office looking at various computer screens showing share prices.
Broker Notes

Macquarie tips 20% upside for this ASX 200 industrials stock

Let's see what the broker is saying about this stock following an update.

Read more »

A man with a wide, eager smile on his face holds up three fingers.
Gold

3 reasons this ASX 200 gold mining giant could soar higher into 2026

A leading expert forecasts more outperformance from this surging ASX 200 gold stock.

Read more »

A young woman lifts her red glasses with one hand as she takes a closer look at news about interest rates rising and one expert's surprising recommendation as to which ASX shares to buy
Broker Notes

Top brokers name 3 ASX shares to buy today

Here's what brokers are recommending as buys this week.

Read more »

A man in a suit smiles at the yellow piggy bank he holds in his hand.
Bank Shares

CBA shares hit a new $176 record high. Too late to buy?

What can stop this bank now?

Read more »

A young man clasps his hand to his head with his eyes closed and a pained expression on his face as he clasps a laptop computer in front of him, seemingly learning of bad news or a poor investment.
Share Fallers

Why James Hardie, Mayne Pharma, Nufarm, and Resimac shares are falling today

These shares are having a tough time on hump day. But why?

Read more »

Person pointing at an increasing blue graph which represents a rising share price.
Share Gainers

Why Adriatic Metals, Catapult, Seek, and TechnologyOne shares are racing higher today

These shares are having a good time on hump day. But why?

Read more »