A LIT time: LITs, LICs prove popular with ASX investors

In an investing world increasingly dominated by exchange-traded funds (ETFs), it can be easy to forget about good old listed investment companies (LICs) and listed investment trusts (LITs). Yet, unlike ETFs, LICs and LITs have been around in Australia for a long time — about 95 years in fact.

Perhaps it’s this wealth of experience that has led to LITs and LICs holding up well in 2020 so far, a year that has seen its fair share of sharemarket turmoil and volatility.

According to the Listed Investment Companies and Trusts Association (LICAT), the sector’s market capitalisation has dropped just 2% over 2019-20. That compares favourably with a 10.9% drop in the market capitalisation of the S&P/ASX 200 Index (ASX: XJO) over the same period.