A Professionally Managed Investment Portfolio A listed investment company, such as Whitefield, holds a professionally managed portfolio of Australian shares in the same way as a managed investment fund may hold a professionally managed portfolio of Australian shares.
A Company Structure Listed investment companies however are “companies” with a fixed number of shares on issue at any point of time, and shareholders are the underlying investors in the company. [Managed investment funds are trusts.]
Increasing or Decreasing Your Investment Shareholders make or redeem an investment in a listed investment company by buying or selling shares in the listed investment company through a stockbroker, or may periodically have the opportunity to take up new shares in the investment company via share issues such as rights issues, new share issues or dividend reinvestment plans. [This compares to investors in a managed investment fund who make deposits or request redemptions from an investment fund].
The Market Price at Which Shares May be Bought or Sold The market price at which a share in listed investment company may be bought or sold primarily depends on the underlying net asset backing of the company, but is also influenced by a range of other factors. [The application price of a managed investment fund is purely based on the underlying asset backing of the fund plus or minus any application or redemption fee or spread.] Other factors which may influence the market price of a listed investment company include (but are not limited to):

(i) the number of buyers and sellers of the company’s shares at a point in time and the volume of shares to bought and sold at that time;
(ii) company tax payable in future periods or future years on capital gains already made by the company;
(iii) the relative cost efficiency of the company’s management expenses

Taxation of Listed Investment Companies Listed investment companies are taxed at company rates on their income and capital gains, but some LICs may pass on the benefit of the tax credit for tax paid to shareholders via the payment of franked dividends in certain circumstances. [Managed investment funds are not taxed directly, however underlying investors are taxed on their share of fund income and gains].
Regular Transparent Reporting of Embedded but Not Realised Capital Gains tax Liabilities Listed investment companies calculate and report the capital gains tax that would be payable on all capital gains made whether realised or unrealised. [Investors making a deposit into a managed investment fund may not be aware of the potential capital gains tax liabilities that may exist on unrealised capital gains in the managed investment fund.]

Distribution of Income

Listed Investment Companies distribute income to shareholders by way of dividends. Depending on the availability of franking credits the dividends may be franked or unfranked.
Where a listed investment company chooses not to pay a dividend, the income is retained and invested by the company and forms part of the company’s asset backing.