Investment Performance

There are two key measures of AFIC’s investment performance.

Portfolio Management

The growth of the Company’s net assets per share plus dividends is a measurement of how the Company’s portfolio of investments has been managed. This is measured relative to the S&P/ASX 200 Accumulation Index (which also assumes reinvestment of dividends) and the rate of inflation (the Consumer Price Index).

AFIC is a medium to long term investor, so our investment performance is focused over a corresponding period, say five to ten years.

Shareholder Return Total return to shareholders is measured by the change in the share price plus dividends. The following table is calculated assuming a reinvestment of dividends. The performance compares favourably with returns provided by the S&P/ASX 200 Accumulation Index. % Per Year Return to 30 September 2008

The reason that these returns differ from those provided under Portfolio Return is that on occasions the Company’s share price can move to trade at a discount or premium to net asset backing i.e. the value of the portfolio. A number of different factors influence this discount/premium including:
	market perception of the 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.

Please note: AFIC is not making any representations concerning its future investment performance. Investment markets can be volatile and can rise and fall quickly and sometimes significantly. Past performance is not necessarily indicative of future performance.