LICAT calls for recognition of ‘misunderstood’ investment trusts
The Listed Investment Companies and Trusts Association (LICAT) has called for Treasury to recognise the importance of listed investment trusts and companies to the Australian economy as it fears they are ‘misunderstood’.
It said closed-ended vehicles could provide stable, long-term capital for investors and be a vital contributor to market stability as they were not forced to sell assets to fund investor withdrawals. They also provided fixed capital and offered the benefits of liquidity and pricing in the open market.
They were also offered structural benefits to investors such as better investment structures and cost and administrative efficiencies as well as the ability to fund Australian infrastructure such as renewable energy and roads.
Angus Gluskie, chairman of LICAT, said: “LICAT recognises Treasury’s interest in both the integrity of financial advice in Australia and the successful operation of the capital markets that fund Australian business. To that end, we hope to continue to work with Treasury, ASIC and other regulators as well as various industry participants, to ensure these protections are safeguarded and the operation of capital markets not hindered.
“However, we have been concerned with the characterisation of the LIC and LIT industry in recent industry and media reports which appear to have misunderstood some of the key structural elements and performance metrics relevant to closed end listed investment vehicles.”
Looking at performance, LICAT said 57% of LICs or LITs had outperformed their benchmark since 2015 compared to 18% of managed funds.
AUTHOR
Laura Dew
Recommended for you
Having sold Madison to Infocus earlier this year, Clime has now set up a new financial advice licensee with eight advisers.
With licensees such as Insignia looking to AI for advice efficiencies, they are being urged to write clear AI policies as soon as possible to prevent a “Wild West” of providers being used by their practices.
Iress has revealed the number of clients per adviser that top advice firms serve, as well as how many client meetings they conduct each week.
Morningstar has made two business development appointments to drive the growth strategy of its financial advice software, AdviserLogic.
