AFIC profit down 18.9 per cent
Australian Foundation Investment Company (AFIC) has posted a half year profit of $118.3 million, down 18.9 per cent on the corresponding period, on the back of a decline in investment income received.
AFIC's half year report to 31 December 2016 found investment income was $135.5 million, down $21.1 million primarily as a result of the significant cut in dividends across a broad range of large companies including resources, energy and supermarkets as operating conditions remained challenge in 2016.
"The contribution from the trading portfolio and options was also down $9.7 million, as the realised gains generated in the prior corresponding period were not repeated this half year," the report said.
"…we will be looking to any possible market pullback, which may arise from further interest rate rises in the US over the course of the year or heightned geopolitical tensions, as a way of adding to holdings at more reasonable prices."
AFIC's portfolio was up 8.6 per cent for the period with the best performing companies outside the large resource companies and the banks were Woolworths, Wesfarmers, and Computershare.
The longer-term performance of the portfolio was 7.2 per cent per annum for the 10 years to 31 December 2016.
Portfolio additions included Link Administration Services, Carsales.com, Isentia Group, and AMA Group, and additions to existing holdings of CSL and Cochlear.
The report said the top investments as at 31 December 2016 were Commonwealth Bank, Westpac, and BHP Billiton.
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