IAF - IAF: Sell Australian Shares On Rallies In 2024 Australia May Still Fall Into Recession

2024-02-05 13:53:46 ET

Summary

• The abrdn Australia Equity Fund Inc is a closed-end fund that invests in Australian companies listed on the Australian Stock Exchange.
• IAF aims to achieve long-term capital appreciation and deliver regular income through dividends received on its portfolio of stocks.
• The fund has returned a positive return of approximately 7% since last year, but risks remain due to the economic backdrop, high valuations, and political and taxation moves in Australia.

IAF Overview

The abrdn Australia Equity Fund Inc ( IAF ) is a closed end fund that invests in Australian companies listed on the Australian Stock Exchange. Its primary aim is to achieve long-term capital appreciation. Secondary to that is the objective to deliver regular income. This is expected to be derived primarily from the underlying dividends received on the portfolio of stocks it holds.

I previously covered this Australian CEF almost a year ago and I rated the fund as a sell at that time. I noted that the market was towards the top of the range and valuations not that compelling. I also viewed there were risks of a recession later in 2023. Additionally, I saw a reasonable chance the discount to NAV could easily widen from about 5% at that time....

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