Beyond Aussie equities: AFIC’s approach to global investment opportunities
Beyond Aussie equities: AFIC’s approach to global investment opportunities
AFIC’s team has a history of delivering sound long term returns via a diversified portfolio of quality Australian companies.
In looking to potentially launch an international LIC in the future, we’ve applied our long-term investment approach and principles for identifying quality companies to build an international portfolio that captures the best of global markets. In this article, we share more about the objectives, composition, and performance of our international portfolio, and the opportunities it offers.
Our international portfolio has grown steadily. As of 30 June 2024, the portfolio's value stands at $147.5 million (1.5% of the total portfolio) a significant increase from the $103.7 million originally invested. This growth signals a promising start, having already exceeded its benchmark index, the MSCI World Index ex Australia, both over the FY24 and since inception.
We’ve applied our long-term approach to managing this portfolio. We like diversification so don’t want to run a highly concentrated portfolio. We have built a portfolio of companies that reflects a balance between two key types of investments: stalwart large companies with great market positions and high growth businesses across various sectors. Given AFIC has been trialling this portfolio for three and a half years, we are now considering the most appropriate next steps for this initiative, including the establishment of a separate low cost global investment company in the future. We will have more to say on this front next year.
Investing in quality companies with great growth prospects
AFIC’s international portfolio is composed of approximately 42 companies — a diversified yet carefully selected collection of businesses.
Among our investments are Home Depot, a company whose growth has influenced retail models like Bunnings in Australia, and HCA Healthcare, the largest private hospital operator in the United States. NextEra Energy, a leading producer of renewable energy, and Freeport-McMoRan, a major copper producer, give shareholders exposure to leading businesses in clean energy and essential materials for future technologies.
Additionally, companies like Microsoft and Nestle represent stalwart enterprises with strong brand positions and product demand worldwide, while companies like Amazon and Nvidia reflect our focus on rapidly expanding sectors such as data centres and AI technologies. We also invest in Builders FirstSource, which innovates in the U.S. home construction industry, providing exposure to evolving consumer and industrial trends.
We also invest in high growth businesses that have proven their potential to shape their industries in the long term. Companies like Chipotle, a successful fast-casual food brand which has scaled its restaurant concept across the U.S. and Novo Nordisk, one of two market leaders in weight-loss drugs, adding exciting growth potential to the portfolio.