Insights

Why did the AFIC share price go backwards in April?

AFIC shares dropped in April. What happened?
The post Why did the AFIC share price go backwards in April? appeared first on The Motley Fool Australia. –

The Australian Foundation Investment Co. Ltd (ASX: AFI) (AFIC) share price went down around 1% in April 2022.

The listed investment company (LIC) is also down by 3.4% since the start of 2022.

What happened in April 2022?

While AFIC has a diversified portfolio, it can drop in value just like any other ASX share.

A LIC’s share price can be influenced by two different things: the underlying portfolio performance of the LIC and changes to the premium/discount that investors are willing to pay for the net tangible assets (NTA) of the LIC.

The S&P/ASX 200 Index (ASX: XJO) also fell by almost 1% during April 2022. So, the AFIC portfolio performed similarly to the ASX 200.

The biggest positions in the AFIC portfolio have the biggest influence on the overall portfolio performance. At the end of March 2022, these were the biggest positions:

Commonwealth Bank of Australia (ASX: CBA), BHP Group Ltd (ASX: BHP), CSL Limited (ASX: CSL), Macquarie Group Ltd (ASX: MQG), Transurban Group (ASX: TCL), Westpac Banking Corp (ASX: WBC), Wesfarmers Ltd (ASX: WES), National Australia Bank Ltd. (ASX: NAB) and Woolworths Group Ltd (ASX: WOW).

Over April 2022, the CBA share price dropped 1.8%, the BHP share price fell 7.2% and the CSL share price climbed 1.9%.

Recent investment performance

Every month, AFIC tells investors about its investment performance.

Over the 12-month period to 31 March 2022, the AFIC net asset per share growth plus dividends, including franking, was 11.4%. That underperformed the 16.6% return of the All Ordinaries Total Accumulation Index (ASX: XAOA), including franking.

The last five years also show underperformance by AFIC, with an average portfolio of 10.6% compared to the 10.7% return of the index.

However, beating the index isn’t the LIC’s stated investment objective. It says:

AFIC aims to provide shareholders with attractive investment returns through access to a growing stream of fully franked dividends and enhancement of capital invested over the medium to long term.

The LIC says that its investment style is long-term, fundamental and ‘bottom-up’. Its annual management cost is 0.14%, with no performance fees.

AFIC share price premium or discount?

Investors get a monthly update about whether AFIC shares are trading at a premium or a discount.

At the end of March 2022, the AFIC share price was at a premium of more than 10%, though the size of the premium has reduced over the last couple of months. It has been a while since the AFIC share price was last trading at a discount to its NTA.

The post Why did the AFIC share price go backwards in April? appeared first on The Motley Fool Australia.

Wondering where you should invest $1,000 right now?

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for over ten years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes could be the five best ASX stocks for investors to buy right now. These stocks are trading at near dirt-cheap prices and Scott thinks they could be great buys right now.

*Returns as of January 12th 2022

More reading

Could AFIC shares be an ASX inflation hedge?
Do AFIC shares trade at a discount right now?
How is AFIC different from an ASX 200 ETF?
Why has the AFIC share price leapt 5% in 4 weeks?

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended CSL Ltd. The Motley Fool Australia has positions in and has recommended Wesfarmers Limited. The Motley Fool Australia has recommended Macquarie Group Limited and Westpac Banking Corporation. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

  • This field is for validation purposes and should be left unchanged.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;


To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.


An active and funded account with a positive trading balance is required to continue to have access to the tools;


Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;


Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US & HK* Trades. Click Here!