Value Investing & LIC's

Many experts believe that the Listed Investment Company (LIC) structure is complimentary to a value investing style. This is because the closed-end structure gives a value manager the freedom to do what he or she does best - find and buy undervalued stocks regardless of market conditions.

Because the Fat Fund is "closed" the manager and his team know exactly how much they have to invest. This is unlike an open-ended fund where investors tend to pour money into the fund after seeing good investment returns (usually at the top of the market) forcing the manager to purchase stocks when they are expensive. On the other hand, in a falling market many investors pull out possibly forcing the manager to sell securities when prices are low.

To learn more about Listed Investment Companies, download the ASX's LIC fact sheet by clicking here.