Mark Freeman, CEO and Managing Director of Australian Foundation Investment Company (ASX: AFI), and Portfolio Manager Brett McNeill outlined the company’s interim result, which included a 2.5 cent special dividend and the intention to consider a further special dividend at year end. The special payments reflect excess franking credits generated through realised capital gains, in addition to dividend income from portfolio holdings.
AFIC’s listed investment company structure allows it to retain reserves and distribute dividends in a measured way, supporting a consistent income stream over time.
Recent performance has lagged a strongly rising market, reflecting weaker share price performance from several core holdings and the company’s limited exposure to gold stocks, which have rallied sharply. The portfolio has been repositioned towards selected high-quality blue-chip and growth companies at more attractive valuations, funded by trimming positions considered overvalued.
Management described the broader market as moderately expensive and said the portfolio remains focused on long-term ownership of quality businesses, with a disciplined approach to valuation and capital allocation.
