by Tristan Harrison


Future Generation Investment Company Ltd (ASX: FGX) is an ASX market-beating idea you can feel good about owning.

It donates 1% of its net tangible assets (NTA) each year to youth-focused charities like Lighthouse Foundation, Mirabel and Variety.

This donation is made instead of any management fees or performance fees on its portfolio performance. That means if its investment portfolio outperforms the index then shareholders get to keep the excess.

Future Generation Investment Company invests in some of Australia’s leading fund managers such as Wilson Asset Management, Regal Funds Management, Paradice Investment Management and Bennelong. The participating fund managers are offering their services for free.

In the financial year to date the Future Generation portfolio has outperformed the S&P/ASX All Ordinaries Accumulation Index by 1.3% before donations. Since inception in September 2014 the Future Generation Investment portfolio has returned an average of 8.5% per annum, outperforming the index by 2.8% per annum.

Another useful aspect to Future Generation is that it aims to pay a growing fully franked dividend. It has increased its dividend each year since 2015 and it currently has a grossed-up dividend yield of 5.3%.

It’s currently undertaking a share purchase plan (SPP) and has just set the price at $1.18, which was the pre-tax net tangible assets (NTA) per share at the end of October 2018. Seeing as it’s trading at $1.205 per share, the SPP price is a slight discount.

Foolish takeaway

Future Generation is a very nice way to get diversified exposure to a variety of ASX shares that the managers believe can beat the market. You can feel good knowing that some money is being donated to youth charities whilst receiving a growing dividend.

I own a small amount of shares and would like to steadily buy more as the years go on.

Back to blog