AFIC, along with other listed investment companies, has what is termed ‘a closed end’ structure. This means the number of shares on issue is fixed and set by the Board from time to time.
As a result, AFIC does not issue new shares or cancel them as investors enter and leave the investment fund. This allows us to concentrate on the performance of the portfolio invested over the longer term without having to provide for continuous inflows or outflows of monies.
The "closed end" structure also removes the motivation to shadow indices and we can therefore take a much longer term approach to our investment horizon. The costs of administering the fund are also reduced as we are not continually issuing and redeeming units in the fund.
This structure also provides AFIC with the ability to pay franked dividends out of after tax realised profits and interest and franked dividends received on its underlying investments.