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Shareprice to NTA

It is important investors take note of where the share price is trading relative to the net asset backing i.e. the value of the portfolio per share.

On occasions the Company’s share price can trade at a discount or premium to net asset backing i.e. the value of the portfolio per share. A number of different factors influence this discount/premium including:

  • Market perception of AFIC’s future earnings potential
  • Perception of management and likely future performance
  • Supply and demand for shares at any one time can fluctuate. In particular, listed investment company shares such as AFIC sometimes fall out of favour. When the general market is running strongly investors may elect to move out of "value" shares into "growth stocks". Conversely when market conditions are more subdued investors may value a steadier stream of dividends and a value based approach to investing
  • The relative benefit of lower costs of managing the portfolio on the behalf of shareholders compared with the higher costs associated with a large proportion of managed funds.

AFIC’s Share Price relative to its net asset backing

AFI Shareprice to NTA_1605