Australian Foundation Investment Company (AFI)

Shares / Stock Code

AFI

Stock Exchange / Sharemarket

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Australian Foundation Investment Company (AFI) is an investment company which invests in Australian equities. At 30 June 2007, the company had market capitalisation of $5.81 billion. The Company listed on Australian Stock Exchange on 30 June, 1962. AFI was founded in 1928 as the Were Investment Trust. At present AFI is the largest LIC in Australia, representing about 20% of the sector. AFIFC owns about 100 listed Australian companies, mostly within the SAP/ASX 200 Index. The company has around 83,000 shareholders. AFI aims at providing its shareholders with attractive investment returns through access to a steady stream of fully franked dividends and enhancement of capital invested. As of June 30, 2007 its top 10 investments were BHP Billiton, Commonwealth Bank of Australia, Westpac Banking Corporation, National Australia Bank, Rio Tinto, Wesfarmers, Telstra Corporation, Woolworths, Coles Group, and Australia and New Zealand Banking Group. In July 2007, the Company sold its holdings to Rinker Group.

AFIC's investment strategy is based on a bottom-up, index unaware, ‘buy and hold’ value-based approach. AFI gives preference to companies with strong management, good free cash flow, strong sustainable margins and a capacity to pay increasing dividends while investing. Within the trading portfolio, it tends to use option strategies in order to derive additional income. The company is distinguished from other LICs through its focus on dividends and dividend growth suiting conservative investors.

Australian Foundation Investment Company History

Australian Foundation Investment Company was incorporated in 1928 as the Were Investment Trust. It is closely associated to JB Were Stockbroking. The Company was renamed to Australian Foundation Investment Trust Ltd in 1937 and adopted its current name in 1939. In 1973, it was used to amalgamate the Capel Court group. Therefore it acquired Brenton Investments, Capel Court Investments, Clonmore Investments, Haliburton Investments, Jason Investments, Jonathan Investments, National Reliance Investments and Sherbourne Investments. AFI was listed on the Australian Stock Exchange on 30 June, 1962.